Ripple to Acquire Hidden Road for $1.25 Billion, Expanding Financial Services

Ripple has announced its intention to acquire Hidden Road, a prominent multi-asset prime broker, in a deal valued at $1.25 billion. This acquisition marks one of the largest deals by the crypto company to date and signifies a strategic move to expand its presence in the financial services sector.

This acquisition comes at a time when digital assets, including bitcoin, are gaining increased attention and acceptance. The regulatory environment in the U.S. has been evolving, with the former SEC's overhang coming to an end, which has opened up the market for more traditional financial services. Ripple CEO Brad Garlinghouse highlighted that the U.S. market is now effectively open, allowing for the maturation of services that address the needs of traditional finance.

Prime brokers like Hidden Road play a crucial role in the day-to-day operations of clearing, securities lending, and leveraged trade execution. These services are frequently utilized by large hedge funds and institutional investors. Hidden Road currently clears $3 trillion annually across various markets and serves over 300 institutional clients. The acquisition by Ripple will enable Hidden Road to leverage Ripple’s balance sheet, significantly expanding its operations and positioning it as the largest non-bank prime broker globally.

Upon completion of the deal, expected in the coming months, Ripple will become the only crypto company to own and operate a global multi-asset prime broker. This move not only enhances Ripple’s service offerings but also boosts the utility of its stablecoin, USD (RLUSD). Hidden Road uses RLUSD as collateral across its prime brokerage products, which Ripple launched last year to compete with market leaders Tether and USD Coin.