Ripple to buy back $285 million of its shares, valuing company at $11 billion – sources

By Krystal Hu

(Reuters) – Cryptocurrency company 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 company at $11.3 billion. Investors are only allowed to sell up to 6% of their stake, sources added, who requested anonymity.

The privately-held company 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.

It expects to do more share buybacks on a regular basis to provide liquidity for investors and has no plan to go public in the United States any time soon due to regulatory uncertainty, said Brad Garlinghouse, chief executive at Ripple.

Garlinghouse said Ripple now holds over $1 billion cash and over $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. Securities and Exchange Commission, where a U.S. District Judge found that sales of XRP on public exchanges were not unregistered securities offerings.

Founded in 2012, the company builds a payment system that facilitates cross-border transactions while promoting the use of XRP. It bought Switzerland-based crypto custody firm Metaco for $250 million last May.

“Growing in the headwinds of the SEC lawsuit was certainly a challenge, but 95% of our customers are non-US financial institutions,” said Garlinghouse, who declined to disclose the size of the payment business.

XRP had a market cap of $30 billion as of Wednesday, according to CoinMarketCap.