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- Ripple Labs Inc. has acquired Swiss crypto firm Metaco for $250 million, making Ripple the sole shareholder of the crypto custodian.
- With the acquisition, Ripple plans to expand its offerings to include custody, issuance, and settlement of tokenized assets for institutional investors.
Ripple Acquires Metaco to Expand Crypto Custody Offerings
Ripple Labs Inc., the American blockchain payments company, has successfully acquired Metaco, a Switzerland-based crypto custody provider, in a deal worth $250 million. The acquisition was completed using a combination of Ripple equity and cash, making Ripple the sole shareholder of the Swiss crypto custodian.
By integrating Metaco’s technology, which facilitates the storage and management of crypto assets, Ripple aims to broaden its range of services to include custody, issuance, and settlement of tokenized assets specifically targeted at institutional investors. Major financial firms such as Citi, BNP Paribas, and Societe Generale’s digital asset arm have already leveraged Metaco’s services to explore new business models.
Expansion into Crypto Custody to Meet Investor Demand
Ripple’s move into the crypto custody space comes at a time when investors are becoming increasingly cautious about the security and storage of their digital assets. The tumultuous events experienced in the crypto market in 2022, including the collapse and bankruptcy filings of several cryptocurrency exchanges, have highlighted the need for reliable and secure custody solutions.
Brad Garlinghouse, CEO of Ripple, believes that there will be a growing demand for crypto custody services among institutional investors. He emphasized that focusing on infrastructure solutions allows companies to mitigate the volatility associated with crypto winters and address the specific needs of their customers.
Garlinghouse stated,
“By focusing on the infrastructure… you’re not really subject to the same gyrations of the crypto winters. If ultimately you’re solving a clear problem at scale for these customers, there’s going to be demand there.”
Ripple’s Ongoing SEC Lawsuit
It is important to note that Ripple’s acquisition of Metaco comes at a crucial time when the company is still entangled in an ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). The SEC has sued Ripple for allegedly offering XRP as an unregistered security.
Despite Ripple’s denial of the SEC’s claims, the lawsuit has been ongoing for more than two years, with the company having spent around $200 million on legal defense costs. Ripple remains hopeful for a resolution in its favor, with CEO Brad Garlinghouse stating that he expects a verdict within the next six months.
In a positive development for Ripple, Judge Torres recently ordered that the Hinman emails, which are considered significant evidence in the case, cannot be sealed as demanded by the SEC.
Conclusion
Ripple’s acquisition of Metaco represents a strategic move to expand its services into the crypto custody sector, catering to the growing demand for secure storage solutions among institutional investors. By integrating Metaco’s technology, Ripple aims to offer a comprehensive suite of services, including custody, issuance, and settlement of tokenized assets. However, the company continues to face legal challenges from the SEC, with the outcome of the ongoing lawsuit yet to be determined.
Nevertheless, Ripple remains optimistic about a favorable resolution in the near future.