Cryptocurrency company Ripple Labs, renowned for its XRP coins, is making a significant move by repurchasing $285 million worth of shares from early investors and employees.
This tender offer, valuing Ripple at $11.3 billion, comes in the aftermath of a legal victory against the U.S. Securities and Exchange Commission (SEC), where a judge ruled that XRP sales on public exchanges were not unregistered securities offerings.
Ripple plans to allocate $500 million for the buyback, primarily to cover the costs of converting restricted stock units into shares and associated taxes. Brad Garlinghouse, Ripple’s CEO, disclosed that the company currently holds over $1 billion in cash and a substantial $25 billion in digital assets, mainly composed of XRP coins.
Notably, early investors are restricted to selling only 6% of their holdings in this repurchase initiative. While Ripple plans to conduct regular share buybacks to enhance liquidity for investors, Garlinghouse emphasized the company’s decision to remain private in the United States due to regulatory uncertainties.
The cryptocurrency firm’s growth trajectory remains robust, with expansion efforts in Europe and Africa following the dismissal of charges against its executives last October. This move positions Ripple as a key player in the evolving crypto landscape, and the ongoing strategic share buyback demonstrates the company’s commitment to enhancing value for both investors and stakeholders.