Ripple Labs, the San Francisco-based cryptocurrency payments firm, will reportedly repurchase US$285 million of its shares, effectively valuing the company at US$11.3 billion. 

The buyback initiative, which is aimed at early investors and employees, will allow them to sell up to 6% of their holdings, according to sources close to the matter cited by Reuters. This move comes as Ripple continues to navigate the complexities of the U.S. regulatory environment, with no immediate plans for a public offering.

The repurchase is part of a broader US$500 million buyback plan that includes costs associated with converting restricted stock units into common shares and related taxes. Ripple Chief Executive Officer Brad Garlinghouse reportedly confirmed the tender offer and highlighted the company’s strong financial position, with over US$1 billion in cash and more than US$25 billion in crypto assets, predominantly in XRP. The decision to buy back shares rather than pursue an initial public offering (IPO) provides liquidity to investors while maintaining greater control over the company’s operations.

In December 2020, the U.S. Securities and Exchange Commission (SEC) sued Ripple and its executives for conducting unregistered securities offerings through the sale of XRP. However, a recent court ruling deemed that XRP sales on public exchanges did not constitute unregistered securities offerings, marking a partial victory for Ripple.

The significance of Ripple’s share buyback lies in its alternative approach to providing investor exits. By opting for a tender offer instead of an IPO, Ripple avoids the additional scrutiny, market fluctuations, and investor expectations that come with going public. 

Ripple’s commitment to its payment protocol, which facilitates cross-border transactions and promotes the use of XRP, remains strong despite regulatory challenges. The company recently acquired the Switzerland-based crypto custody firm Metaco for US$250 million.

XRP is the sixth largest cryptocurrency by market capitalization of approximately US$31 billion. 

XRP rose 1% to US$0.5759 in the last 24 hours, as of 4:00 p.m. ET, according to CoinGecko data.