Hidden Road Receives Broker-Dealer License
Hidden Road, a prime brokerage firm focusing on foreign exchange (FX) and digital assets, has recently been granted a broker-dealer license by the U.S. Financial Industry Regulatory Authority (FINRA). This approval follows Ripple’s acquisition of Hidden Road for an impressive $1.25 billion, marking the largest transaction in Ripple’s history.
Expanding Financial Offerings
With its new regulatory status, Hidden Road is set to broaden its financial offerings for institutional investors. The services will include financing, custody, and clearing for fixed-income products. The firm aims to become a comprehensive non-bank brokerage firm, linking traditional finance with the digital asset space.
Noel Kimmel, President of Hidden Road, stated, “This license will allow the company to reach a wider array of institutional clients.”
In light of the firm’s expansion plans, many potential clients who have been hesitant about engaging with cryptocurrency due to a lack of trustworthy intermediaries may find increased confidence in the services offered by Hidden Road.
Leveraging Blockchain Technology
Hidden Road intends to utilize Ripple’s RLUSD stablecoin as collateral in its offerings and plans to migrate its post-trade activities to the XRP Ledger blockchain. This move is considered a significant advancement toward integrating cryptocurrencies with traditional financial processes, enhancing both speed and transparency of settlements.
Firm Background and Market Growth
Founded in 2018 by Marc Asch, a veteran from SAC Capital and Point72, Hidden Road has attracted notable investors, including Citadel Securities and Coinbase Ventures, who supported its $50 million Series A funding round last year. The demand for crypto prime brokerages has surged, especially after the collapse of FTX, as these firms absorb counterparty risks typically avoided by traditional banks.
Future Growth and Market Expansion
As Hidden Road ramps up staffing to cater to increasing institutional demand and prepares to extend operations into Asian and European markets, this acquisition reinforces Ripple’s standing in the institutional finance sector. It marks a pivotal moment in the cryptocurrency ecosystem, combining traditional financial infrastructure with blockchain technology.
