Ripple is reportedly buying back $285 million of its shares, valuing the Fintech firm at around $11 billion. This, according to sources familiar with the matter and cited by Reuters.
Crypto firm Ripple Labs, which is well-known for its XRP token, is preparing to buy back $285 million worth of shares in the firm from early backers and workers, according to sources familiar with the development, according to a report by Reuters. Investors are only permitted to sell as much as 6% of their total stake, the sources explained.
The privately held enterprise blockchain firm confirmed the tender offer, noting that it intends to spend $500 million in the upcoming buyback in order to cover the costs associated with converting restricted stock units into shares (and covering applicable taxes).
Ripple says it aims to carry out share buybacks regularly to offer liquidity for investors and has no intention to go public in the US for now, at least because of the lack of regulatory clarity. This, according to Brad Garlinghouse, CEO at Ripple.
Garlinghouse stated that Ripple currently possesses more than $1 billion cash and more than $25 billion worth of crypto-assets, primarily XRP tokens, on its balance sheet.
This latest offering has been announced following Ripple’s partial victory in its legal battle with the US Securities and Exchange Commission (SEC). This is notably a case where a U.S. District Judge determined that the sales of XRP via publicly accessible exchange platforms were not considered to be unregistered securities offerings.
Established back in 2012, Ripple develops a payment system that facilitates cross-border transfers while enabling the use of XRP. It acquired Switzerland’s digital asset custody firm Metaco for $250 million this past May.
Garlinghouse, who has not shared the exact size of the payment business, remarked:
“Growing in the headwinds of the SEC lawsuit was certainly a challenge, but 95% of our customers are non-US financial institutions.”