Prime brokerage Hidden Road, which was recently purchased by Ripple for $1.25 billion, has obtained a broker-dealer license from the Financial Industry Regulatory Authority (FINRA) — a strategic decision that boosts its capabilities in the fixed-income arenas.
As a FINRA broker-dealer, Hidden Road is positioned to enhance its fixed-income prime brokerage offerings and broaden its functions in conventional markets, the firm declared on April 17. This encompasses providing institutional clients with regulatory-compliant clearing and financing options across fixed-income securities.
Membership in FINRA signifies a substantial dedication to compliance and safeguarding investors. It also enhances the registrants’ credibility in the perspective of investment bankers, according to Telos Capital Advisors, a Dallas-based investment banking entity.
Hidden Road manages a prime brokerage and credit network, processing over $10 billion in daily trades on behalf of more than 300 institutional clients. Founded in 2018, the firm initially concentrated on foreign exchange markets before diversifying into digital assets.
These advantages positioned Hidden Road as an appealing acquisition for the blockchain payments framework Ripple, which ultimately acquired the organization on April 8.
Ripple’s chief technology officer, David Schwartz, characterized the acquisition as a “pivotal moment for the XRP Ledger” by broadening the settlement layer’s application across conventional financial sectors.
Under Ripple’s guidance, Hidden Road will “significantly enhance its ability to accommodate its client needs and become the largest non-bank prime broker worldwide,” remarked CEO Brad Garlinghouse.
Related: US to launch its first XRP-based ETF on NYSE Arca
Supportive regulatory environment fosters Ripple’s growth
Ripple’s acquisition of Hidden Road follows a favorable regulatory atmosphere in the United States after the election of President Donald Trump.
In January, Ripple obtained money transmitter licenses in both Texas and New York, enabling the firm to facilitate capital transfers within those jurisdictions.
Two months later, the Securities and Exchange Commission (SEC) dismissed its legal action against Ripple, concluding one of crypto’s most extended legal disputes and allowing the company to refocus on growth.
At that moment, crypto attorney John Deaton stated that the ruling serves as the “final affirmation that [XRP tokens] are regarded as digital commodities, not securities.”
The SEC is poised to welcome a pro-crypto Chair after Paul Atkins’ nomination was ratified by the US Senate on April 9. Following his swearing-in, Atkins will replace Mark Yueda, who has been serving as Acting Chair since January 20.
Related: Court allows 60-day suspension of SEC, Ripple appeals case
