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Ripple said Tuesday it agreed to buy Prime Brokerage Firm Hidden Road, the biggest acquisition ever of Crypto Startup, for $1.25 billion.
Founded in 2018, Hidden Road offers clearing, prime brokerage and finance services across forex, digital assets, derivatives, swaps, bonds. Currently, it has cleared more than $3 trillion per year across a market with over 300 institutional clients, including hedge funds.
The acquisition is one of the biggest deals in the digital asset space to date, topped with Stripe’s February $1.1 billion deal to buy Buy Bridge.
Ripple CEO Brad Garlinghouse said the deal was put together after Hidden Road “constrained” growth due to balance sheet restrictions and began looking for external capital.
“This is a big deal for Ripple, but it’s a big deal for the industry too,” Garlinghouse told CNBC over the phone.
Ripple, last valued at $11.3 billion in the 2024 stock buyback, said Hidden Road plans to use RLUSD Stablecoin, which was launched in December, upon trading close.
“Collectives are important,” Garlinghouse said. Hedge funds and other institutional investors usually need to take out complex trading positions such as o-loans or short sales that require collateral.
Ripple’s acquisition of Hidden Road is subject to required regulatory approval. Garlinghouse told CNBC it expects the deal to close by the third quarter of 2025.
Regulation tailwind
Ripple won a major victory last month when it filed a prolonged lawsuit against a company that accused U.S. securities and exchanges of offering illegal securities.
The crypto industry is generally boosted by Donald Trump being re-elected as US president, promoting the benefits of crypto and pledging policies that are beneficial to the industry.
When asked whether this more crypto regulatory environment gave Ripple an additional driving force for Prime Securities trading, Garlinghouse said, “In contrast to open warfare legal tactics, such transactions make more sense if you have a supportive regulatory environment.”
The Crypto chief was previously critical of the SEC and its former leader Gary Gensler, overseeing aggressive legal action against several crypto companies, including Ripple.
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