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- 1 The amount would be paid – half in cash and the rest in equity.
- 2 With the acquisition, Ripple would be serving crypto custody to institutions.
Payment protocol Ripple acquires Metaco is seeking to step into the crypto custody sector. With the acquisition of a Swiss entity working in the crypto domain, the San Francisco-based fintech firm also settled its offshore expansion plan.
The deal amount is reported to be 250 million USD, also touted as Ripple’s first major acquisition to date. Ripple announced the acquisition of Switzerland-based digital asset custody and tokenization technology provider Metaco on Wednesday, May 15.
The company offers financial services, including storing, trading, issuing, and managing digital assets. Some of its influential clients include Citi, Societe Generale, BNP Paribas, and BBVA.
Metaco has offerings in different countries, including Switzerland, Germany, France, Turkey, Singapore, Hong Kong, the Philippines, Australia, the United Kingdom, and the United States.
Ripple Navigating Through Odds
Ripple’s chief executive officer, Brad Garlinghouse, said the deal was the largest the company made in the previous year. The chaos the crypto market had been through during the past year resulted in many cryptocurrencies and companies being vulnerable.
The broader crypto market witnessed some prominent digital assets disappear and some big names filing for bankruptcy. While those who braved the storm of crypto winter compromised on several aspects, from cutting down operations to layoffs.
Garlinghouse cited the crypto winter and said the time of other companies halting their expansion and taking cost-cutting measures like layoffs; it’s a “really important signal for the industry.” He added that the move would signify the company’s ” strong position ” and that it’s about to “play offense.”
In addition to the external market challenges, Ripple’s move to expand to the crypto custody domain after buying Metaco came amid its ongoing legal tussle with the US SEC. Ripple CEO thinks there will be demand for crypto custody services from institutional investors. He said it is “focusing on the infrastructure” would help eliminate the “gyrations of the crypto winters.”
He thinks that the services will have demands from the customers if they see the problems getting resolved. Reuters reported that the company disclosed that over half of the acquisition amount of 250 million USD was paid in cash, with the rest in equity. Garlinghouse expressed concerns with the regulators ramping up enforcement actions in the United States.
In addition, he considered Metaco, a Swiss company with no employees native to the US, as an appeal. He said the markets within other countries are clear with rules that help in growth as companies invest.
Increasing scrutiny has become one of the major crypto industry-wide concerns. The enforced actions against companies working in the space made companies look for offshore expansions.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
