Ripple Acquires Hidden Road for $1.25 Billion to Expand Institutional Services

Ripple has agreed to acquire Hidden Road, a prime broker that caters to institutional clients in both traditional and digital asset markets, for $1.25 billion. This acquisition is one of the largest recent deals in the crypto sector and is expected to close in the coming months, pending regulatory approval. The deal aims to integrate traditional finance operations with digital assets, positioning Ripple as a pioneer in this space. Hidden Road is a key player in both traditional and digital asset markets, handling trades for over 300 institutional clients and processing over $3 trillion annually in trading volume across various assets. Ripple believes this acquisition will enhance its institutional business by combining Hidden Road’s robust infrastructure with its own blockchain expertise.

Ripple’s acquisition of Hidden Road is not just about expanding its client base; it is also about leveraging the XRP Ledger (XRPL) to handle high-speed settlements reliably. Hidden Road plans to move its post-trade operations to the XRPL, aiming for lower operational costs and better scalability. This move is a significant test of XRPL’s capabilities, as it will need to handle the high volume of institutional transactions that Hidden Road processes annually. The success of this integration could prove that XRPL can support demanding institutional tasks, which are currently handled by specialized custodians and established settlement networks.

One of the key aspects of this deal is Ripple’s plan to use its stablecoin, Ripple USD (RLUSD), as collateral in Hidden Road’s prime brokerage services. This could be a game-changer in the financial industry, as RLUSD could be the first stablecoin to enable efficient cross-margining between traditional and digital markets. This would improve liquidity and create a simpler trading setup for institutional investors, further bridging the gap between traditional finance and decentralized finance (DeFi).

The acquisition is expected to drive global growth for Hidden Road. The company’s CEO, Marc Asch, stated that the deal provides the resources and licenses needed to expand globally. With Ripple’s support and technology, Hidden Road aims to scale its business and offer its services to more clients worldwide. This strategic move positions Ripple as a key player in the financial sector, with the potential to revolutionize cross-border payments and institutional custody services.

Ripple’s CEO, Brad Garlinghouse, described the acquisition as a "once-in-a-lifetime opportunity" for the crypto industry to access the largest and most trusted traditional markets. The deal is expected to close in the coming months, subject to regulatory approvals. Ripple has been a customer of Hidden Road for years and participated in its Series B financial round, indicating a long-standing relationship and confidence in the broker's capabilities. The timing of the announcement has sparked speculation among market observers, with some suggesting that Ripple could have won the bid to acquire Hidden Road as early as 2022 or 2023 but delayed the public announcement until its legal issues with the SEC were resolved. This strategy would have protected Hidden Road's business interests and reputation during a period of regulatory uncertainty.