Digital asset infrastructure provider Ripple has acquired prime broker Hidden Road in a deal valued at $1.25 billion.
Brad Garlinghouse
The transaction is expected to close in the coming months and is subject to regulatory approvals.
Through the move, Ripple has become the first crypto business to own and operate a global multi-asset prime broker.
The acquisition marks one of the largest in the digital assets world, with Ripple is set to “inject billions of dollars of capital” as it looks to scale Hidden Road to “satisfy demand” for the firm’s brokerage, clearing and financing platform.
Specifically, Hidden Road’s offering is focused on a one-stop-shop service across FX, digital assets, derivatives, swaps, and fixed income.
“We are at an inflection point for the next phase of digital asset adoption – the US market is effectively open for the first time due to the regulatory overhang of the former SEC coming to an end, and the market is maturing to address the needs of traditional finance,” said Brad Garlinghouse, chief executive of Ripple.
“With these tailwinds, we are continuing to pursue opportunities to massively transform the space, leveraging our position and the strengths of XRP to accelerate our business and enhance our current solutions and technology.”
Addressing the motivation behind the move, the businesses flagged the importance of the digital assets space having the right core infrastructure in place in order to achieve the next phase of growth – that is to say, for institutional adoption.
Ripple pointed to the fact that brokers “bring the necessary credibility and professional trading services expected in legacy finance to digital assets,” working to bridge traditional and decentralised finance.
Read more: Digital assets and traditional finance: Can two parallel lanes converge?
Following the acquisition, Hidden Road is set to migrate its post-trade activity across XRPL. In addition, Ripple will offer its cross-border payments solution, Ripple Payments, and provide custody services to Hidden Road’s customers.
Marc Asch, founder and chief executive of Hidden Road, explained: “With new resources, licenses, and added risk capital, this deal will unlock significant growth in Hidden Road’s business, allowing us to increase capacity to our customer base, expand into new products, and service more markets and asset classes.
“Together with Ripple, we’re bringing the same level of trust and reliability that institutional clients are accustomed to in traditional markets — designed and optimised for a digital world.”