Ripple plans to buy prime brokerage firm Hidden Road for $1.25 billion, marking one of the biggest deals in the digital asset space this year.
With the acquisition set to close in the coming months, Ripple will become the first cryptocurrency firm to operate a global multi-asset prime broker, bridging the gap between traditional and decentralized finance.
“We are at an inflection point for the next phase of digital asset adoption – the US market is effectively open for the first time due to the regulatory overhang of the former [Securities and Exchange Commission] coming to an end, and the market is maturing to address the needs of traditional finance,” Ripple CEO Brad Garlinghouse said Tuesday in a prepared statement.
Ripple and the SEC in March ended their yearslong battle over the crypto firm’s XRP token, which the agency alleged was an unregistered securities offering. A judge disagreed, giving Ripple and the SEC each a partial win. The SEC sought to appeal, then dropped the case.
Under Trump-era leadership, the SEC has dropped lawsuits against several crypto firms, and current commissioners have launched a crypto task force to encourage a regulatory environment that “protects investors … and supports innovation.”
“With these tailwinds, we are continuing to pursue opportunities to massively transform the space, leveraging our position and the strengths of XRP to accelerate our business and enhance our current solutions and technology,” Garlinghouse said.
Hidden Road clears $3 trillion annually and has more than 300 institutional customers. It also offers prime brokerage and financing across foreign exchange, digital assets, derivatives, swaps and fixed income.
The acquisition will bolster Ripple’s new stablecoin, RLUSD, as Hidden Road plans to leverage it as collateral throughout its prime brokerage products.
“With new resources, licenses, and added risk capital, this deal will unlock significant growth in Hidden Road’s business, allowing us to increase capacity to our customer base, expand into new products, and service more markets and asset classes,” said Hidden Road CEO Marc Asch in a prepared statement.
“Together with Ripple, we’re bringing the same level of trust and reliability that institutional clients are accustomed to in traditional markets — designed and optimized for a digital world,” Asch said.
Several high-dollar deals have occurred within the crypto realm in recent months, as regulators position themselves as more amenable to digital assets.
Stripe last October announced it would purchase Bridge, a platform aimed at making it easier to take payment via stablecoin, for $1.1 billion. Kraken last month said it would buy futures platform NinjaTrader for $1.5 billion.
