KEY POINTS
- Ripple said its acquisition of NYDFS-regulated Standard Custody will pave the way for a 'compliant' route
- Standard Custody's CEO will retain his position and become Ripple's Stablecoins SVP
- Ripple acquired crypto custodian Metaco last year, but most of its executives have reportedly departed
Fintech giant Ripple has completed its acquisition of digital asset custodian Standard Custody & Trust Company, moving the company behind the XRP token closer to its goal of rolling out a U.S. stablecoin.
Ripple announced the acquisition deal's completion Tuesday, saying the development will help in "paving a compliant path forward" as it received the necessary regulatory approvals for the deal.
For Ripple, acquiring Standard Custody is crucial in its broader goals in the cryptocurrency industry as the custodian is not only under the regulatory oversight of the New York Department of Financial Services (NYDFS) but it also has licensing in Singapore and Ireland.
This enables the company to further strengthen its enterprise infrastructure solutions powered by blockchain and digital asset technology, allowing for better institutional customer service to tokenize, store, move, and exchange value, Ripple said.
It went on to say that the acquisition's deal closure follows the financial services titan's announcement of plans to launch a U.S. dollar-backed stablecoin, citing the huge demand for stablecoins. "Ripple will use both the stablecoin and XRP in its payments solution to continue serving enterprise customers around the world," the company added.
Under the deal, Standard Custody CEO Jack McDonald will retain his post, but he will also join Ripple as its Senior Vice President of Stablecoins.
Very excited to share that as part of the deal close, I am joining @Ripple as the SVP of Stablecoins to lead the team bringing Ripple’s stablecoin to market later this year (though remaining CEO of Standard Custody as well)! https://t.co/qIWAeRJ8ll
— Jack McDonald (@_JackMcDonald_) June 11, 2024
The acquisition comes after Ripple acquired another crypto custody firm, Metaco, in May 2023. Several reports in April revealed that most of Metaco's executives have left the company since being owned by Ripple.
Among the high-profile departures were that of CTO and chief customer officer Angel Nunez Mencias and head of product marketing Mei Li Powell. Metaco's head of sales Craig Perrin also reportedly made an exit.
The executive exodus came after reports emerged regarding the supposed concern of some Metaco partners over the digital assets custody firm's acquisition by Ripple, which has been under scrutiny by the U.S. Securities and Exchange Commission (SEC) since December 2020 for alleged violations of securities laws.
Just last month, the Wall Street regulator told the court that a multi-billion-dollar fine was necessary for Ripple to deter the company from future violations. The SEC has accused Ripple of profiting nearly $1 billion from its securities laws violations.
Ripple has cried foul over the SEC's case for years and vehemently denied it violated any laws. Its chief legal officer Stuart Alderoty called SEC Chair Gary Gensler a "struggling political liability" after his hostile enforcement-first regulatory approach toward the crypto industry.
