Cryptocurrency company Ripple Labs, $XRP, is buying back $285 million worth of shares in the company from early investors and employees, per Reuters.
The investment, also referred to as a tender offer, assessed the company's value at $11.3 billion. According to undisclosed sources, investors are limited to selling a maximum of 6% of their stake. Ripple, a privately-held company, officially acknowledged the tender offer and outlined its intention to allocate $500 million for the planned buyback. This fund will cover expenses related to converting restricted stock units into shares and addressing tax obligations.
Ripple, led by CEO Brad Garlinghouse, envisions conducting regular share buybacks to ensure liquidity for investors. Despite holding over $1 billion in cash and crypto assets, primarily in XRP coins, Garlinghouse stated that the company has no immediate plans to go public in the United States due to regulatory uncertainties. Ripple recently experienced a partial victory in its prolonged legal battle with the U.S. Securities and Exchange Commission, as a U.S. District Judge determined that XRP sales on public exchanges did not constitute unregistered securities offerings.
Established in 2012, Ripple focuses on developing a payment system that facilitates cross-border transactions, with an emphasis on promoting the use of XRP. Last May, the company acquired the Switzerland-based crypto custody firm Metaco for $250 million. Despite facing challenges amid the SEC lawsuit, Garlinghouse highlighted that 95% of Ripple's customers are non-U.S. financial institutions
