The cryptocurrency startup Ripple Labs, best known for its XRP currencies, is repurchasing $285 million worth of stock from early backers and staff members, according to two people who know the situation and spoke with Reuters.
The corporation was valued at $11.3 billion after the investment, sometimes referred to as a tender offer. According to further sources who want to remain anonymous, only 6% of an investor’s ownership may be sold.
The privately held business declared its intention to repurchase $500 million to pay taxes and the expenses associated with converting restricted stock units into shares, in addition to confirming the tender offer.
According to Brad Garlinghouse, CEO of Ripple, the company has no plans to go public in the U.S. anytime soon owing to regulatory uncertainties. Instead, it intends to do more share buybacks to offer liquidity to investors regularly.
XRP tokens make up the majority of the roughly $25 billion in cryptocurrency that Ripple now has on its bank sheet, according to Garlinghouse.
The announcement follows Ripple’s partial victory in a protracted legal battle with the U.S. Securities and Exchange Commission, wherein a U.S. District Judge determined that XRP sales on open markets did not qualify as unregistered securities offerings.
Established in 2012, the business develops a payment system that encourages the usage of XRP and streamlines cross-border transactions. Last May, it spent $250 million to acquire Metaco, a cryptocurrency custody company located in Switzerland.
“Welcoming the SEC lawsuit’s headwinds was undoubtedly difficult, but 95% of our clients are financial institutions outside of the U.S.,” Garlinghouse stated, declining to share the company’s exact revenue. As of Wednesday, CoinMarketCap estimated that the market value of XRP was $30 billion.
Comment Template