- Key Points
- Crypto startup Ripple has agreed to buy prime brokerage firm Hidden Road for $1.25 billion, the company’s biggest acquisition to date.
- It marks one of the largest deals in the digital asset space to date, topping Stripe’s $1.1 billion deal to buy stablecoin payments platform Bridge.
- Hidden Road plans to use Ripple’s RLUSD stablecoin, which launched in December, as collateral across its prime brokerage products.
The crypto startup’s largest acquisition to this point, Ripple announced on Tuesday that it had agreed to purchase prime brokerage Hidden Road for $1.25 billion. Founded in 2018, Hidden Road offers clearing, high brokerage, and financing offerings across foreign exchange, digital property, derivatives, swaps, and fixed income. It presently clears greater than $3 trillion annually across markets with over three hundred institutional customers, inclusive of hedge funds.
The acquisition marks one of the biggest offers within the virtual asset space to this point, topping Stripe’s $1.1 billion February deal to shop for Bridge, a platform that makes it easier for agencies to take fees via stablecoins.
According to Ripple CEO Brad Garlinghouse, the deal came together after Hidden Road started out searching for doors capital when it located that its growth changed into “restrained” with the aid of obstacles on its stability sheet. Garlinghouse telephoned Experssepaper and stated, “This is a large deal for Ripple — however, additionally a huge deal for the enterprise.” As the whole crypto industry gets extra into conventional finance, we need pinnacle tier infrastructure that allows you to support the monetary institutions that want to be available in.”
Ripple, which was finally worth $11.Three billion in a 2024 proportion buyback, said that the plan is for Hidden Road to use its RLUSD stablecoin, which was released in December, as collateral throughout the agency’s prime brokerage merchandise once the transaction closes. “Collateral is fundamental” within the top brokerage services industry, Garlinghouse stated. Hedge funds and other institutional investors generally require collateral to take out loans or complicated trading positions, including short-selling.
The acquisition of Hidden Road with the aid of Ripple nevertheless calls for regulatory approval. Expersseper heard Garlinghouse say that he thinks the deal will close inside the 1/3 sector of 2025 or in advance.
Regulatory tailwinds
Last month, Ripple gained an extensive battle while the US Securities and Exchange Commission dropped an extended legal case against the business enterprise that accused it of carrying out an illegal securities offering.
The crypto enterprise has been boosted by the re-election of Donald Trump as U.S. President, who has touted the blessings of crypto and promised favorable policies for the enterprise.
Garlinghouse spoke back, “Deals like this make loads extra feel if you have a supportive regulatory environment — rather than the open battle criminal techniques,” while asked if Ripple’s prime brokerage takeover turned into aided by a regulatory environment that became greater favorable to crypto. The crypto leader has previously been critical of the SEC and its former leader, Gary Gensler, who oversaw competitive legal actions towards multiple crypto companies, consisting of Ripple.