The privately-held firm said it plans to spend $500 million in the planned buyback to cover the costs of converting restricted stock units into shares and taxes
Crypto currency company Ripple Labs, known for its XRP coins, is buying back $285 million worth of shares in the company from early investors and employees, two sources familiar with the matter told Reuters.
The investment, also known as a tender offer, valued the firm at $11.3 billion. Investors are only allowed to sell up to 6% of their stake, sources added, who requested anonymity.
The privately-held firm confirmed the tender offer, and said it plans to spend $500 million in the planned buyback to cover the costs of converting restricted stock units into shares and taxes.
Ripple expects to do more share buybacks on a regular basis to provide liquidity for investors and has no plan to go public in the US any time soon because of regulatory uncertainty, said Brad Garlinghouse, chief executive at Ripple.
Garlinghouse said Ripple now holds more than $1 billion cash and more than $25 billion worth of crypto, mostly XRP coins, on its balance sheet.
The offering comes after Ripple’s partial win in its lengthy legal fight with the U.S. SEC, where a U.S. District Judge found that sales of XRP on public exchanges were not unregistered securities offerings.
Founded in 2012, the firm builds a payment system that facilitates cross-border transactions while promoting the use of XRP. It bought Switzerland-based crypto custody company Metaco for $250 million last May.
Growing in the headwinds of the Securities and Exchange Commission lawsuit was certainly a challenge, but 95% of our customers are non-US financial institutions, said Garlinghouse, who refused to reveal the size of the payment business.
XRP had a market capitalisation of $30 billion as of Wednesday, as per CoinMarketCap.