The developer of the XRP Ledger, Ripple, has decided to acquire Metaco, a Switzerland-based crypto infrastructure provider. The company primarily focuses on institutional custody and tokenization of digital assets.
Ripple describes itself as one of the leading providers of crypto solutions for businesses worldwide. The flagship product of the company is the XRP Ledger, a blockchain-based payment network for enterprises and institutions. The acquisition of the Swiss Metaco is supposed to help Ripple expand its institutional offering of infrastructure solutions, according to an anonymous source.
Update 14:00 CET: The acquisition has been confirmed in a public statement: Ripple acquires custody provider Metaco for $250 million.
Wide range of services for institutions
Metaco was founded in 2015 in Lausanne and is a technology company focused on solutions for digital assets. The company's core product, Harmonize, is an orchestration platform for comprehensive management of digital assets. From asset-agnostic custody and trading to tokenization, staking, and smart contract management, Metaco aims to connect its institutional clients with the broad universe of decentralized finance and Web3 applications. The platform serves renowned banks such as Citi, DBS, BBVA, and more.
The activities of both companies have some overlapping areas. With the acquisition of Metaco, Ripple aims to expand its digital asset offering for banks and enterprises. Customers will be provided with the technological foundation for custody, issuance, and settlement of any type of digital assets. In return, Metaco gains access to Ripple's established customer base as well as capital to meet the new demand.
"As the go-to provider for traditional finance companies looking to integrate crypto and blockchain solutions, Ripple is uniquely positioned to address the growing institutional crypto custody market, expected to reach $10T by 2030. Custody is a key facet of the infrastructure required for enterprise crypto services. Adding these capabilities to Ripple’s already growing product solutions means we can continue to support customers as they look to utilize crypto and blockchain for real-world use cases across all phases of adoption." - Monica Long, President at Ripple
Ripple in battle with US regulators
In December 2020, Ripple made headlines due to a lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The agency alleges, in an ongoing legal battle that has been dragging on for two and a half years, that Ripple raised over $1.3 billion in capital through the sale of the XRP cryptocurrency as an unregistered securities offering since 2013. Subsequently, several trading platforms removed the cryptocurrency from their offerings.
Ripple denies the allegation and claims that the XRP token should not be considered as an investment contract but rather used in its business to facilitate cross-border transactions between banks and other financial institutions. A resolution to the legal dispute is currently not in sight, and according to CEO Brad Garlinghouse, the legal expenses for the defense have amounted to up to $200 million.