Payments firm MoneyGram nixed its partnership with Ripple Labs in March. Now, it’s keen on Jed McCaleb’s other crypto venture, Stellar.
The Dallas-based company this week revealed it will leverage Stellar’s tech to lower the cost of international remittances.
As part of the agreement, MoneyGram will also use Circle and Coinbase’s stablecoin USD Coin (USDC) issued on XLM.
According to the announcement, both senders and recipients will be able to instantly exchange USDC and local currencies.
United Texas Bank will serve as the fiat settlement bank.
MoneyGram didn’t want Ripple Labs’ money anymore
MoneyGram dissolved its relationship with Ripple just as the company was first embroiled in its ongoing $1.3 billion unregistered securities lawsuit with the Securities and Exchange Commission (SEC).
Ripple actually paid MoneyGram tens of millions of dollars for that relationship — and the marketing pull it afforded.
- The SEC filed legal action against Ripple Labs, executive board chairman Christian Larsen, and chief exec Brad Garlinghouse in December 2020.
- The agency alleges Ripple Labs raised $1.3 billion in an unregistered security offering for its XRP token.
- Per the SEC’s statement, Ripple Labs failed to disclose information related to its finances and business operations.
McCaleb, who co-founded San Francisco-based Ripple Labs in 2012, is the only founder the SEC did not personally name in its lawsuit.
MoneyGram is tight-lipped on the financial terms of the agreement with Stellar. But their relationship at one point ran deeper.
Stellar once flirted with buying MoneyGram
Earlier this year, the Stellar Development Foundation actually floated the possibility of acquiring MoneyGram.
McCaleb reportedly left Ripple due to quarreling among the co-founders. He immediately founded Stellar — a direct competitor to Ripple in both the crypto and international remittances industries.
Mark Karpeles, the subsequent CEO, was found guilty in March 2019 of falsifying data and remains embroiled in lawsuits over the 140,000 BTC ($7.6 billion) still in Mt. Gox’s possesion.
Meanwhile, McCaleb serves as the Chief Architect of the Stellar Development Foundation.
He’s now sold most of his XRP holdings according to a seven-year schedule outlined in a legal settlement between McCaleb and Ripple Labs.
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