9th April 2025 – (New York) Ripple has announced its acquisition of the crypto prime broker Hidden Road for a price tag of $1.25 billion. The deal underscores Ripple’s ambition to strengthen its position in the digital asset sector while enhancing the operational capabilities of Hidden Road, which is renowned for its services in both foreign exchange and precious metals, but is particularly noted as a leading digital asset prime broker.

The acquisition comes on the heels of Hidden Road’s successful $50 million Series A funding round in 2022, predominantly backed by crypto firms and notable exceptions such as Citadel Securities. Currently, Hidden Road serves approximately 300 institutional clients and processes an impressive $3 trillion in transactions annually across various markets. The integration of Ripple’s resources is expected to catalyse growth and expand the range of services that Hidden Road can offer to its clientele.

Prime brokers differ substantially from traditional broker dealers, mainly in their provision of trading support and funding solutions. They typically facilitate margin funding, allowing clients to engage in leveraged trading. With Ripple poised to inject billions of new capital into Hidden Road, this infusion is anticipated to substantially enhance the brokerage’s capacity to extend funding to its clients. In addition, prime brokers, including Hidden Road, offer essential clearing services, enabling institutions to have transactions executed elsewhere while still benefiting from netting and funding advantages provided by the prime broker.

Marc Asch, Founder and CEO of Hidden Road, articulated the transformative potential of the acquisition, stating, “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.”

This acquisition is strategically aligned with Ripple’s long-standing intent to augment the usage of its XRP Ledger. Historically, Ripple has been recognised for its advanced technology; however, the market valuation of its XRP cryptocurrency — presently sitting at a market cap of $113 billion — suggests a level of adoption that has yet to materialise at the scale anticipated for the XRP Ledger.

Through the integration of Hidden Road, Ripple aims to significantly increase the transaction volume on the XRP Ledger. The company plans to leverage its RLUSD stablecoin as collateral for margin trading, while also incorporating the XRP Ledger into Hidden Road’s back office operations. This means that transaction recording and clearing processes will be conducted on the XRP Ledger, thereby enhancing the efficiency of these functions.

Nonetheless, the transition raises critical questions regarding privacy and security. Many institutions have been hesitant to abandon permissioned blockchains due to concerns over privacy. The substantial query is whether these entities will feel secure if Hidden Road employs the public XRP Ledger for its clearing and settlement processes.

One potential solution to address privacy concerns is the frequent use of new wallets to obfuscate transaction trails. However, this approach could undermine Hidden Road’s objective of transaction aggregation, potentially making each institution’s global trading activities more conspicuous.

Another possibility lies in the application of the Interledger Protocol, which, while facilitating cross-chain transactions, may inadvertently expose some level of transaction data, combined with a private Layer 2 solution that could offer enhanced privacy without sacrificing the benefits of blockchain technology.

Alternatively, Hidden Road might consider implementing a private version of the XRP Ledger. While this would likely enhance the appeal of the technology for certain institutional players, such a solution may ultimately benefit Ripple Labs more substantially than the immediate price of XRP itself.