Ripple, a leading asset manager, announced its acquisition of Hidden Road, a rapidly growing prime broker friendly to cryptocurrencies.
The deal is valued at $1.25 billion and is expected to close in the coming months, pending regulatory approval. This acquisition is significant as it positions Ripple as the first cryptocurrency firm to own a global, multi-asset prime broker.
The announcement comes after reports that Hidden Road was in discussions for a potential takeover. Recently, the firm received an unsolicited offer from another crypto company, although the bidder’s identity was not disclosed.
Hidden Road serves over 300 institutional clients and processes more than $3 trillion annually in various assets, including foreign exchange, digital assets, derivatives, and fixed income.
Ripple’s CEO, Brad Garlinghouse, highlighted that this acquisition occurs at a crucial time for digital asset adoption in the U.S. market. He noted that the regulatory environment is improving, allowing for greater integration of traditional finance with the crypto market.
With this acquisition, Ripple aims to enhance the use of its stablecoin, Ripple USD (RLUSD), which will now serve as collateral for Hidden Road’s brokerage products. This integration is a significant step towards creating a unified trading environment for institutional investors, allowing for efficient cross-margining between traditional and digital markets.
Additionally, Hidden Road will transition its post-trade operations to the XRP Ledger (XRPL), which Ripple claims will lower costs and increase scalability for high-volume institutional finance.
Marc Asch, CEO of Hidden Road, expressed optimism about the acquisition, stating it would provide essential resources, licenses, and risk capital to support the company’s growth.
Asch believes this move will allow Hidden Road to expand its business, enhance its service offerings, and reach a broader market. Overall, this acquisition marks a pivotal moment in the evolving landscape of the crypto sector.
