Ripple has entered the leveraged exchange traded fund financing business through Ripple Prime, providing funding to investment products that seek to deliver multiples of the daily performance of individual stocks and market indexes.
Summary
- Ripple Prime has entered the leveraged ETF financing market, providing stock swap arrangements traditionally handled by major Wall Street banks.
- The brokerage is financing a Sandisk leveraged ETF that pays a rate based on overnight bank funding costs plus four percentage points.
- Ripple entered institutional brokerage through its $1.25 billion Hidden Road acquisition and has since expanded into equity derivatives and financing.
- Ripple Prime raised $275 million in August to support its U.S. brokerage operations and recently expanded its institutional relationship with Brevan Howard.
According to an Oct. 7 report by the Wall Street Journal, Ripple’s prime brokerage division is financing leveraged ETFs through arrangements traditionally handled by major banks and securities firms.
One of the funds using the service is the Tradr 2X Long SNDK Daily ETF, which seeks to deliver twice the daily performance of Sandisk shares. The fund pays Ripple a financing rate based on the overnight bank funding benchmark plus four percentage points.
The arrangement allows Ripple to earn financing fees from funds that use derivatives to provide leveraged exposure to publicly traded companies.
XRP price showed little positive reaction to Ripple’s latest expansion and was trading near $1.40 at the time of writing, down over 5% in the past 24 hours. Technical indicators remained mostly bearish, with seven sell signals against five buy signals, suggesting continued weakness despite the latest development.
Ripple Prime finances leveraged ETFs through stock swaps
Leveraged ETFs generally seek to produce two or three times the daily return of an underlying asset or index. Their managers can use derivatives to obtain the required exposure without purchasing an equivalent amount of shares.
A fund targeting twice the daily performance of Nvidia, for example, can enter into a total return swap with a brokerage firm. Under the agreement, the broker provides exposure to the stock’s returns while the fund pays financing costs and other agreed charges.
The broker typically manages its own exposure by buying shares or entering into other financial transactions. The ETF receives the agreed returns under the swap, subject to the terms of the contract.
Ripple Prime is providing this type of financing to leveraged ETF operators, according to the Journal. The Sandisk fund’s financing arrangement includes a four percentage point spread above the overnight bank funding rate.
Financing costs can vary depending on the assets involved, the structure of the swap and the terms negotiated between the fund manager and its counterparty. The reported Sandisk arrangement provides a specific example of the fees Ripple can collect through the business.
Leveraged ETFs reset their exposure daily, meaning their performance over periods longer than one day can differ from a simple multiple of the underlying stock’s cumulative return. Daily compounding and market volatility can affect the results investors receive.
Ripple’s involvement is on the financing side of these transactions. The company supplies brokerage services and derivatives exposure to fund operators, while the ETFs remain responsible for their investment strategies.
Ripple’s Hidden Road acquisition established its brokerage business
Ripple entered institutional prime brokerage through its $1.25 billion acquisition of Hidden Road, a financial services firm that already handled trading, clearing and financing across several asset classes.
The company announced the acquisition in April 2025 and completed it in October of that year, when Hidden Road was renamed Ripple Prime.
As previously reported by crypto.news, the completed transaction gave Ripple an established institutional brokerage operation covering digital assets, foreign exchange, derivatives and fixed income.
Hidden Road had built its business around providing trading firms and institutional investors with clearing, financing and access to multiple markets through a single brokerage relationship.
The acquired operation had handled approximately $3 trillion in annual clearing activity, according to Ripple’s earlier disclosures. The business had grown roughly threefold since the acquisition was announced, the company subsequently reported.
Ripple Prime later added services for institutions trading conventional securities alongside cryptocurrencies.
In August 2026, the brokerage launched its Delta One business, offering total return swaps tied to U.S. listed stocks, market indexes and digital assets.
The service allows institutional clients to gain economic exposure to underlying assets without directly holding them. Ripple Prime handles the swap arrangements, financing and related collateral requirements.
The leveraged ETF financing business uses the same type of derivative instrument, with fund managers obtaining the exposure needed to pursue their daily return targets.
Ripple Prime raised $275 million to fund its U.S. operations
Before entering the leveraged ETF financing market, Ripple Prime had secured new capital to support its institutional brokerage activities.
In August, the company raised $275 million through a private placement of senior unsecured notes sold to institutional investors.
Ripple said the proceeds would support working capital and general corporate purposes as its regulated U.S. brokerage operation expanded its financing, clearing and trading services.
KBRA assigned the notes a BBB investment grade rating, while Piper Sandler served as the lead placement agent. The company did not disclose the notes’ maturity, interest rate or participating investors.
The transaction followed a $200 million financing facility secured in May from funds managed by Neuberger Berman.
Unlike the senior notes, the Neuberger Berman facility was structured to provide lending capacity based on institutional client demand. Ripple said the financing would support margin services covering digital assets, equities, fixed income and foreign exchange.
Together, the two arrangements provided Ripple Prime with access to as much as $475 million in financing through different structures.
Ripple Prime’s existing operations cover more than 300 institutional clients, including hedge funds, proprietary trading firms and liquidity providers. The brokerage offers services such as clearing, settlement, financing and cross margining across supported markets.
In its August Delta One announcement, Ripple said the brokerage held more than $1 billion in regulatory net capital.
The company described its equity derivatives business as a financing and clearing operation, without a proprietary trading or market making desk.
Institutional client relationships
Ripple’s latest move into ETF financing follows a separate agreement with hedge fund manager Brevan Howard earlier this week.
On Oct. 6, the company expanded its agreement with Brevan Howard, which manages approximately $35 billion in assets, to provide prime brokerage, clearing and financing services across traditional and digital markets.
The agreement allows Brevan Howard’s investment teams to access multiple asset classes through Ripple Prime’s brokerage infrastructure.
Brevan Howard Group Chief Operating Officer Alan McGroarty said the platform was expected to improve the firm’s trading operations and capital efficiency.
The relationship between the companies predates the latest brokerage agreement. Funds managed by Brevan Howard affiliates participated in Ripple’s $500 million strategic investment round in November 2025.
Ripple valued itself at $40 billion during that fundraising, which included investors affiliated with Fortress Investment Group and Citadel Securities, alongside Pantera Capital, Galaxy Digital and Marshall Wace.
Separately, Ripple Prime has incorporated Ripple USD, or RLUSD, into its institutional services, allowing eligible clients to use the stablecoin as collateral.
Ripple has disclosed plans to move some post trade activities onto the XRP Ledger, although the reported leveraged ETF financing arrangements have not been identified as using either RLUSD or XRP.
The brokerage’s U.S. regulatory operations were established before Ripple completed its acquisition of Hidden Road. In April 2025, Hidden Road obtained a FINRA broker dealer license covering additional fixed income brokerage, clearing and financing services.
The following month, the firm introduced over the counter, cash settled cryptocurrency swaps for U.S. institutional investors through its U.K. entity regulated by the Financial Conduct Authority.
