00:00Today on Forbes, how a $500 million cash infusion from Wall Street adds billions to Ripple's
00:07founders' net worths. Crypto conglomerate Ripple has raised $500 million at a $40 billion
00:14valuation, led by funds tied to Fortress Investment Group, Citadel Securities, as well as Pantera
00:22Capital, Galaxy Digital, Ravon Howard, and Marshall Weiss. The deal follows a $1 billion tender
00:30offer at the same valuation and lifts co-founder Chris Larson's net worth to an estimated $13.8
00:37billion, up from $10.2 billion. CEO Brad Garlinghouse also joins the billionaire ranks, with an estimated
00:45$3.5 billion fortune based on a 6% stake in the company and XRP holdings. Arthur Brito,
00:53one of the XRP Ledger's creators, is likewise a billionaire. He holds at least $1.3 billion
00:59XRP in wallets tracked by Gray Wolf Analytics, valued at roughly $3 billion.
01:05In a statement on Wednesday, Ripple said, quote,
01:08The decision to accept $500 million in new common equity reflects the strategic value of deepening
01:14relationships with financial partners whose expertise complements Ripple's expanding global
01:19suite of products. Ripple, in fact, didn't need the money. It sits on about $35 billion XRP,
01:27worth roughly $80 billion at Wednesday's $2.27 price. Those tokens, representing more than 30% of
01:35XRP's total supply, are released from escrow each month, giving Ripple one of the most lucrative
01:41self-funding mechanisms. The company initially pitched XRP as a, quote, bridge currency to replace
01:48SWIFT and streamline cross-border payments. SWIFT is a secure network connecting banks worldwide,
01:54created in 1973, that enabled them to handle international transactions. Ripple won splashy
02:00partnerships, including with MoneyGram in 2019, yet struggled to convert attention into sustained
02:06usage of XRP. Last year, it earned a spot on Forbes' list of, quote, zombie blockchains,
02:12decentralized projects with grossly inflated valuations, despite limited adoption and scant
02:18transaction revenue. Then came the regulators. In 2020, the U.S. Securities and Exchange Commission
02:24sued Ripple for selling XRP as an unregistered security. The five-year legal battle ended in August
02:31with a $125 million settlement. Rather than retreat, Ripple spent. Over two years, it has executed one
02:39of crypto's most aggressive acquisition streaks, buying GT Treasury, a treasury management software
02:45provider, for $1 billion, prime broker Hidden Road for $1.25 billion, stablecoin infrastructure
02:53platform Rail for $200 million, and custody firms Medeco for $250 million and Standard Custody
03:01for an undisclosed amount. So far, it's working. Ripple says its payment volumes have surpassed
03:08$95 billion, and its RLUSD stablecoin, launched in December, just crossed $1 billion in market cap.
03:16It's already being used as collateral on Ripple Prime, the rebranded Hidden Road business,
03:21which was clearing roughly $3 trillion a year across 300 institutional clients before the acquisition.
03:27The brokerage is also expanding into collateralized lending for XRP, according to the firm.
03:34In the end, survival often proves the best trade. Thanks to its loyal fanbase that continues to
03:40support XRP's lofty valuation, the blockchain company that once promised to reinvent global
03:45payments has taken a detour and bought itself some serious plumbing along the way. Still,
03:51it's questionable whether the hodgepodge of businesses held by the crypto conglomerate
03:55justify the $179 billion valuation currently being afforded to Ripple and its token.
04:02The next big question for Ripple is whether it can turn its acquisitions
04:05into a unified system that actually drives value back to Ripple's core technology, the XRP ledger.
04:12While the XRP ledger may still lag behind more popular blockchains in terms of app usage and
04:17developer activity, it is clear Ripple the company is a very different beast than what it was just a
04:23year ago. Joe Nagar, CEO and CIO of crypto hedge fund Feynman Point Asset Management, which is also an
04:30investor in Ripple, says, quote, Sometimes people view change as bad. I think that's actually a sign of
04:36health and greatness, especially in emerging technologies. For full coverage, check out Nina
04:42Bambasheva's piece on Forbes.com. This is Kieran Meadows from Forbes. Thanks for tuning in.
Comments