Ripple’s $500 million share sale last month included investor protections that effectively guaranteed profits for participants, including Citadel Securities and Fortress Investment Group, according to Bloomberg.
The deal granted investors the right to sell their shares back to Ripple after three or four years at an annualized return of 10%, unless Ripple goes public beforehand, Bloomberg reported on Monday, citing people with knowledge of the matter.
Ripple retained the option to repurchase the shares at the same intervals, but would need to offer investors a 25% annualized return if it chose to do so, the report said. Also, the sale included a liquidation-preference clause giving new investors priority over existing shareholders in the event of a sale or bankruptcy.
The report estimated that Ripple would need $732 million to repurchase the investor group’s shares after four years at a 10% annualized return.
Funds affiliated with Marshall Wace, Brevan Howard, Galaxy Digital, and Pantera Capital also participated in the round, which valued the XRP Ledger-related firm at $40 billion, reportedly negotiating safeguards that ensured a minimum upside despite crypto’s notoriously volatile asset prices.
Investor documents apparently revealed that participating funds assessed that at least 90% of Ripple’s net asset value derived from XRP, the crypto token closely tied to the company. In other words, investing in Ripple was also regarded as a bet on XRP’s performance.
Ripple held $124 billion worth of XRP as of July, much of it locked up or released gradually over time, the report stated. The token is down more than 40% from its mid-July high, and has fallen around 16% since Oct. 31, shortly before the deal was announced, The Block’s price page shows.
Meanwhile, a comparable investor-protection mechanism appeared earlier this year in Brevan Howard’s investment in Berachain. That deal included a $25 million “refund right” giving the hedge fund recourse under certain conditions — another example of traditional finance applying downside protection to crypto allocations.
Aside from its affiliations with XRP and the XRP Ledger, Ripple’s digital payments business operates RLUSD, a U.S. dollar-backed stablecoin with a circulating supply of roughly $1.3 billion, according to CoinGecko.
In November, the company also launched a digital asset prime brokerage for the U.S. market following its $1.25 billion acquisition of Hidden Road. The rollout was part of a broader effort to diversify revenue streams beyond XRP-related business lines.
The Block reached out to Ripple for comment.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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