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(Reuters) - Ripple said on Tuesday it will buy multi-asset prime broker Hidden Road in a $1.25 billion deal, making it one of the largest acquisitions by the crypto company.
This is the second billion-dollar-plus deal involving a crypto company this year, as digital assets such as bitcoin gain more prominence under U.S. President Donald Trump, who has promised to be the "crypto president".
"The U.S. 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," Ripple CEO Brad Garlinghouse said.
Prime brokers help in the day-to-day operations of clearing, securities lending, leveraged trade execution, among others. Large hedge funds and institutional investors usually avail these services.
Hidden Road clears $3 trillion annually across markets with over 300 institutional clients. The deal will allow the Hidden Road to expand exponentially using Ripple's balance sheet and become the largest non-bank prime broker globally, the crypto company said.
Ripple will also become the only crypto company to own and operate a global multi-asset prime broker due to the deal, which is expected to close in the coming months, it said.
The acquisition also enhances Ripple USD's (RLUSD) utility as Hidden Road uses the stablecoin as collateral across its prime brokerage products.
Ripple launched RLUSD, a stablecoin pegged to the U.S. dollar, last year, as it sought to disrupt the market dominated by Tether and USD Coin.
(Reporting by Pritam Biswas in Bengaluru; Editing by Leroy Leo)
