Ripple Acquires Prime Broker Hidden Road for $1.25 Billion

According to the press release, the deal is one of the largest in the digital asset space. It will strengthen the ecosystem, including stablecoin RLUSD, blockchain XRPL and the Ripple Payments service.

The deal is expected to close in the coming months following regulatory approval.

Ripple became the first cryptocurrency company to own and operate a global multi-disciplinary prime brokerage, project officials said. 

Hidden Road processes $3 trillion in transactions per year and serves more than 300 institutional clients. Ripple plans to use the resources and licenses of the new subsidiary to scale its business and enter new markets;

According to Hidden Road founder and CEO Marc Asch, the deal will allow the company to expand its new product offerings and asset classes.

Ripple said Hidden Road will use RLUSD as collateral, making the stablecoin the first to enable efficient cross-marginal trading between traditional and digital assets. 

Hidden Road's post-trading activities will also migrate to XRPL, strengthening the blockchain's user base.

Ripple CEO Brad Garlinghouse called the deal an important step toward increasing institutional participation in the digital economy.

The growth of XRP 

According to a Standard Chartered report, the value of the token could jump to $12.5 by 2028, writes CoinDesk. It is expected to rise to $5.5 by the end of 2025, and to $8 by 2026. Analysts predict that the XRP rate will continue to increase on the back of high demand for cross-border payments.

The report noted: XRPL assumes the role of a ”gas pedal” of international transfers - about the same as stablecoins. This makes XRP an important tool for financial transactions outside of traditional banking systems.

Standard Chartered sees in the growth of the asset a potential similar to bitcoin. An additional driver will be changes in the leadership of the U.S. Securities and Exchange Commission (SEC). The possible approval of exchange funds based on Ripple token will also have a positive impact.

Among XRPL's challenges, analysts highlighted the limited number of developers and low level of ”value extraction”. However, these factors are offset by the growing interest in tokenization of assets and expanding potential in digital payments.

At the time of writing, XRP is trading at $1.95 (+8.8% overnight), according to CoinGecko. The token is among the top 10 cryptocurrencies by capitalization with a value of $114.13 billion.

SEC to drop claims against Ripple

The US Securities and Exchange Commission (SEC) is withdrawing the appeal in the case against Ripple. This was announced by the CEO of the fintech company Brad Garlinghouse.

The entrepreneur noted that the proceedings lasted more than four years.

In December 2020, the SEC filed a lawsuit against Ripple, accusing the company of selling $1.3 billion worth of unregistered XRP securities. Garlinghouse and co-founder Chris Larsen were also named as defendants in the case.

In July 2023, Judge Analisa Torres of the Southern District of New York ruled that programmatic sales and other distributions of the Ripple token did not constitute an offer and sale of investment contracts. However, according to the decision, the marketing of the coins to large players violated securities laws.

The court dismissed the SEC's interlocutory appeal, finding that it lacked sufficient evidence and that its consideration would not ”materially advance the ultimate dismissal of the case.”

Subsequently, the Commission dismissed the suit against Garlinghouse and Larsen. The parties entered into a settlement agreement that precluded further charges on the former grounds.

In August 2024, Judge Torres issued a final judgment in the case, fining Ripple $125 million. The regulator originally claimed $2 billion. In October, the SEC contested the verdict.

The agency took steps to revisit earlier court decisions in terms of erroneous application of the law. The commission suggested revisiting offerings and sales of XRP on digital asset platforms, Garlinghouse and Larsen's involvement, and distributions of the token ”in exchange for consideration other than cash.”