On Tuesday, Ripple announced its agreement to acquire Hidden Road, a prime brokerage firm, for $1.25 billion. This acquisition marks the largest in Ripple’s history.
Hidden Road, which was established in 2018, specializes in providing clearing, prime brokerage, and financing services across various financial markets, including foreign exchange, digital assets, derivatives, swaps, and fixed income. The firm currently facilitates the clearing of over $3 trillion annually and serves more than 300 institutional clients, most notably hedge funds.
This acquisition represents one of the most significant transactions in the digital asset sector to date, exceeding Stripe’s $1.1 billion acquisition of Bridge earlier this year, a platform designed to simplify stablecoin payments for businesses.
Ripple CEO Brad Garlinghouse noted that the acquisition was prompted by Hidden Road’s difficulties in expanding due to balance sheet constraints, which led the firm to seek external investment. “This is a big deal for Ripple — but also a big deal for the industry,” Garlinghouse stated in a phone interview with Finance Newso. He emphasized that as the crypto sector increasingly intersects with traditional finance, high-quality infrastructure is essential to support the financial institutions looking to engage.
Ripple, which received a valuation of $11.3 billion during a share buyback in 2024, plans for Hidden Road to adopt its RLUSD stablecoin, launched in December, as collateral in various prime brokerage services once the acquisition is finalized.
“Collateral is key,” Garlinghouse remarked, noting that hedge funds and other institutional investors often require collateral for loans or complex trading strategies, including short selling.
Completion of the acquisition is contingent upon regulatory approvals, and Garlinghouse indicated that he anticipates the deal to finalize by the third quarter of 2025.
Regulatory Tailwinds
Ripple recently achieved a significant milestone when the U.S. Securities and Exchange Commission dropped a lengthy legal case against the company, which had accused Ripple of conducting an illegal securities offering.
The broader cryptocurrency sector has also seen a boost following Donald Trump’s reelection as U.S. president, with promises of supportive policies for the industry that encourage growth.
When asked if this more favorable regulatory climate influenced Ripple’s decision to pursue the prime brokerage acquisition, Garlinghouse responded that “deals like this make a lot more sense when you have a supportive regulatory environment — as opposed to the open warfare legal tactics.”
Garlinghouse has previously expressed his concerns regarding the SEC and its former chairman Gary Gensler, who spearheaded aggressive enforcement actions against multiple crypto firms, including Ripple.
