Ripple Labs, the innovative fintech firm behind the popular XRP token, has announced plans to buy back $285 million worth of shares from early backers and employees. The buyback, aimed at offering liquidity for investors, comes as Ripple seeks to further support its growth and strengthen its position in the market.
Under the buyback program, investors will be able to sell up to 6% of their total stake in the company. This move is part of Ripple’s efforts to provide ongoing liquidity for its stakeholders and foster a healthy investment environment.
In a statement confirming the tender offer, Ripple explained that the buyback will also cover the costs associated with converting restricted stock units into shares, along with any applicable taxes. The company plans to allocate $500 million to the program, reflecting its commitment to supporting its stakeholders and ensuring their interests are well-protected.
While Ripple’s CEO, Brad Garlinghouse, confirmed the buyback, he also emphasized that the company has no immediate plans to go public in the United States. The lack of regulatory clarity is cited as the main reason behind this decision. Nonetheless, Garlinghouse highlighted Ripple’s strong financial position, with over $1 billion in cash and more than $25 billion in crypto-assets, predominantly XRP tokens, on its balance sheet.
This recent development follows Ripple’s partial victory in its legal battle with the US Securities and Exchange Commission (SEC). The ruling by a US District Judge determined that the sales of XRP on publicly accessible exchange platforms were not considered unregistered securities offerings.
Founded in 2012, Ripple has been a pioneer in developing a payment system that enables cross-border transfers and utilizes the XRP token. The company recently made headlines with its acquisition of Swiss digital asset custody firm Metaco for $250 million. This strategic move further expands Ripple’s capabilities and strengthens its position in the digital asset market.
Despite the challenges faced during the SEC lawsuit, Ripple remains resilient and focused on serving its vast base of non-US financial institution customers. With the share buyback and its robust financial position, Ripple is well-positioned to continue driving innovation in the fintech industry and revolutionizing cross-border payments.