A well-known "scammer" in the crypto space quietly builds a trading giant

Author: Forbes

Brad Garlinghouse, CEO of Ripple Labs.

Image source: Stephen McCarthy/Sportsfile/Collision/Getty Images

In March 2024, we published a report on "zombie blockchains," listing at least 50 cryptocurrency projects with market capitalizations exceeding one billion dollars, primarily driven by speculation rather than real-world applications. Ripple, which aims to replace the global banking messaging system SWIFT but has yet to achieve its ambitions, topped the list. At that time, its market cap was $36 billion, while annual transaction fee revenue amounted to just $583,000.

But recently, Ripple Labs has gained significant momentum.

In the private market, the company's share price currently fluctuates between $135 and $170, representing an increase of roughly two to three times since the beginning of the year, with a valuation ranging from $22 billion to $30 billion. For reference, this valuation approaches that of stablecoin issuer Circle. Ripple sought to compete with Circle and even attempted to acquire it prior to Circle’s June initial public offering (IPO). Currently, Circle is valued at approximately $34 billion, with its stock price rising 352% since its IPO on June 5. Ripple's token XRP (which does not confer ownership in the company) has surged 366% this year, reaching a market cap close to $150 billion.

Ripple is now also riding the wave of the digital asset treasury trend.

In recent weeks, several companies have announced treasury strategies centered around XRP, most notably Evernorth, which plans to raise over $1 billion. The fact that such a long-struggling company is now being considered for token holdings demonstrates substantial confidence in Ripple.

This shift isn't surprising given the conclusion of Ripple's five-year legal battle with the SEC.

In 2020, the SEC sued Ripple, alleging it had sold XRP as an unregistered security, ultimately resulting in Ripple paying a $125 million fine. Additionally, Ripple has completed several high-profile acquisitions: acquiring treasury management software provider GTreasury for $1 billion, prime broker Hidden Road for $1.25 billion, and stablecoin payments platform Rail for $200 million. Between 2023 and 2024, Ripple also acquired digital asset custodian Metaco for $250 million and Standard Custody, with the acquisition amount undisclosed.

Although the XRP Ledger still lags behind other more popular blockchains in terms of application usage and developer activity, it's clear that today's Ripple is vastly different from what it was a year ago.

"Sometimes people view change as negative, but I see it as a sign of healthy development and progress toward excellence—especially in emerging technology fields," said Joe Naggar, CEO and Chief Investment Officer at cryptocurrency hedge fund Feynman Point Asset Management, which is also one of Ripple's investors.

He added, "Ripple has demonstrated meticulous thinking in structuring its capital, though regulatory pressures previously prevented this from becoming fully evident. I believe Ripple vividly illustrates how far a company can advance without strict legislation and regulation. This careful approach also distinguishes Ripple from other protocols with large treasuries—those foundations lack genuine leadership and clarity about whom they serve. But if you ask Brad Garlinghouse, Ripple's CEO, his answer is very clear: serve shareholders."

Naggar believes that when looking for a comparable to Ripple today, one should look not to Circle or other blockchain firms, but to Coinbase. Coinbase similarly operates custody and prime brokerage services and has a revenue-sharing agreement with Circle.

Austin King, CEO of cryptocurrency trading firm Nomina—and who in 2019 sold his first company to Ripple—offered an even stronger view: "There are many people in crypto who criticize Ripple, but the reality is, Ripple possesses remarkable vision. Their technology has existed for ten years already. I think Ripple’s current bet is finding synergies across these different businesses, integrating them into a comprehensive financial services group."

Therefore, Ripple's next major challenge will be whether it can successfully integrate its acquired businesses into a unified system, thereby creating real value for its core technology—the XRP Ledger.