Ripple makes first major acquisition with $250M purchase of Metaco

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Ripple recently announced its first major acquisition following the purchase of Switzerland-based crypto custody firm Metaco. The San Francisco-based startup paid over 50 percent of the $250 million purchase in cash, while the remainder through equity.

This strategic move allows Ripple to broaden its range of services by incorporating the capability to securely store, issue and facilitate settlements for various tokenized assets.

Ripple CEO Brad Garlinghouse praised Metaco as a trusted pioneer in institutional digital asset custody, highlighting the company’s accomplished leadership team and unparalleled track record with customers.

Garlinghouse also emphasized Ripple’s commitment to leveraging its strong financial position to advance in key areas of crypto infrastructure. He said that adding Metaco to Ripple’s portfolio was a significant milestone for expanding its product offerings and establishing a more substantial presence worldwide.

“Metaco is a proven leader in institutional digital asset custody with an exceptional executive bench and a truly unmatched customer track record.”

Brad Garlinghouse, Ripple CEO

The CEO also highlighted the appeal of Metaco due to its Swiss base and a workforce that is primarily composed of non-U.S. employees, particularly in the context of heightened regulatory scrutiny facing crypto companies in the U.S.

The company behind XRP has been actively collaborating with traditional financial institutions to facilitate the integration of crypto and blockchain technologies into its existing infrastructure. Despite being distinct entities, Ripple retains significant ownership of XRP tokens.

According to CoinGecko, XRP is the sixth-largest digital currency globally, with approximately $23 billion worth of XRP in circulation. Through the recent announcement, Ripple is expanding its range of operations and diversifying its activities.

Established in 2015 in Switzerland, Metaco specializes in developing technology that allows financial institutions to securely store and handle digital assets. Among its clientele are prominent institutions such as Citi, BNP Paribas and the digital asset division of Societe Generale.

Despite being acquired by Ripple, Metaco will maintain its autonomy as a separate brand and business unit led by founder and CEO Adrien Treccani.

In a statement on Wednesday, Treccani voiced how the partnership with Ripple would empower Metaco to utilize its more extensive scale and market influence, allowing the company to achieve its objectives and provide enhanced value to its clients “at a faster pace.”

Treccani also said the company looks forward to “continuing to serve unprecedented levels of institutional demand” that its clients have anticipated.

SEC’s lawsuit

Speaking to CNBC on Tuesday before the Metaco acquisition announcement, Garlinghouse shared his optimism regarding Ripple’s legal dispute with the U.S. Securities and Exchange Commission (SEC). He maintained that the company would attain a resolution within a matter of months.

“I think the most likely scenario is that we’ll hear [a decision] sometime either two to four or five months from now,” he said.

In December 2020, Ripple and its team encountered a legal challenge in the form of a lawsuit filed by the SEC regarding the sales of XRP tokens.

The SEC contended that XRP should be classified as a security and, as such, should have been registered with the commission. Ripple and a few key executives amassed over $1.38 billion through the sale of XRP tokens.

Ripple has refuted these allegations, asserting that its token is a form of currency and not subject to registration as an investment contract.

Garlinghouse said the company would not rush to conduct an initial public offering (IPO). He also revealed that Ripple currently possesses around $1 billion in cash reserves on its balance sheet.

The legal dispute is anticipated to incur approximately $200 million in costs for the company.


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