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Ripple on Tuesday said that it’s agreed to buy prime brokerage firm Hidden Road for $1.25 billion, in the crypto startup’s biggest acquisition to date.
Founded in 2018, Hidden Road offers clearing, prime brokerage and financing services across foreign exchange, digital assets, derivatives, swaps and fixed income. It currently clears more than $3 trillion annually across markets with over 300 institutional customers, including hedge funds.
The acquisition marks one of the largest deals in the digital asset space to date, topping Stripe’s $1.1 billion February deal to buy Bridge, a platform that makes it easier for businesses to take payment via stablecoins.
Ripple CEO Brad Garlinghouse said the deal came together after Hidden Road found itself “constrained” in growth due to balance sheet limitations and began looking for external capital.
“This is a big deal for Ripple — but also a big deal for the industry,” Garlinghouse told CNBC by phone.”As the entire crypto industry gets more into traditional finance, we need top tier infrastructure to be able to support the financial institutions that want to come in.”
Ripple, which was last valued at $11.3 billion in a 2024 share buyback, said that once the transaction closes the plan is for Hidden Road to use its RLUSD stablecoin — which launched in December — as collateral across the company’s prime brokerage products.
“Collateral is key” in the prime brokerage services industry, Garlinghouse said. Hedge funds and other institutional investors typically require collateral o take out loans or complex trading positions, such as short selling.
Ripple’s acquisition of Hidden Road remains subject to necessary regulatory approvals. Garlinghouse told CNBC he expects the deal to close no later than the third quarter of 2025.
Regulatory tailwinds
Ripple scored a major victory last month, when the U.S. Securities and Exchange Commissioned dropped a protracted legal case against the company that accused it of conducting an illegal securities offering.
The crypto industry has been generally boosted by the re-election of Donald Trump as U.S. president, who has touted the benefits of crypto and promised favorable policies for the industry.
Asked whether this more pro-crypto regulatory environment gave Ripple added impetus for its prime brokerage takeover, Garlinghouse said that “deals like this make a lot more sense when you have a supportive regulatory environment — as opposed to the open warfare legal tactics.”
The crypto chief has previously been critical of the SEC and its former leader Gary Gensler, who oversaw aggressive legal actions against multiple crypto firms, including Ripple.