In early November, key Wall Street players decided to invest $500 million in the Ripple project. This amount will enable it to exceed $40 billion in valuation, while imposing very strict safeguards to secure their investment.
Ripple: an investment with crypto safeguards
Since its launch in 2012, Ripple has clearly focused its ambitions on the banking sector and traditional finance. This strategy is currently paying off, particularly since the US SEC dropped its charges related to the management of the XRP cryptocurrency. This decision quickly attracted the attention of certain key players on Wall Street, such as Citadel Securities and Fortress Investment Group, motivating them to invest $500 billion in this crypto company in early November.
This was a golden opportunity for Ripple to secure the support of leading financial players, although its president, Monica Long, was quick to point out that her company did not really need these funds to continue its record expansion in 2025.
An official showcase that has just revealed its behind-the-scenes workings in a Bloomberg article that exposes the significant safeguards imposed by these investors to protect themselves in the event of crypto turmoil. This is particularly true considering that “two of the funds that invested estimated that at least 90% of the company’s net asset value came from the XRP token .“
Put option with guaranteed return and ”liquidation preference”
As a reminder, Ripple has a stock of XRP in an escrow account currently estimated at 34.5 billion units according to the xrpscan website, or approximately $70 billion. This is a significant amount, yet it has almost halved since last July ($125 billion), when the price of XRP reached an all-time high of $3.65.
A drop of more than 40% allows us to consider the options imposed by Wall Street investors in a whole new light, especially when you consider that this means they can sell their shares back to Ripple after 3 or 4 years with a guaranteed annualized return of 10%, unless the company goes public during that period.
If Ripple decides to buy back these shares, it will have to offer an annualized return of 25% in return. In any case, these VIP investors also benefit from a “liquidation preference” clause that is supposed to guarantee them priority over other shareholders in the event of a sale or bankruptcy.
