Ripple has announced a deal to acquire the New York-based digital asset platform Standard Custody and Trust Company, pending regulatory approval.

Once the acquisition is finalized, Ripple will become the sole shareholder of Standard Custody, leveraging its limited-purpose trust charter and money transmitter licenses to enhance its regulatory license portfolio.

Ripple’s expansion into the US market

Ripple, known for its innovative blockchain-based payment solutions, is strategically positioning itself to further penetrate the US financial sector. The deal with Standard Custody & Trust, subject to approval from the New York Department of Financial Services, adds a crypto custody and settlement business to Ripple’s portfolio. This acquisition enables customers to maintain custody with Ripple instead of relying on external partners.

Today, we’re excited to announce that Ripple has signed a deal to acquire @StandardCustody, strengthening our product offerings and adding to our growing portfolio of regulatory licenses around the world. Learn more about our latest acquisition: https://t.co/JJp51mEabL

— Ripple (@Ripple) February 13, 2024

Despite its focus on international markets and ongoing legal disputes with the U.S. Securities and Exchange Commission (SEC), Ripple remains committed to enhancing its regulatory qualifications and operational capabilities within the country. By acquiring Standard Custody & Trust Co., a company with a New York trust charter, it aims to unlock new opportunities for growth. Ripple aims to broaden its offerings beyond its renowned payments network and venture into other financial products where institutional customers can leverage blockchain technology.

The acquisition of Standard Custody & Trust will enable Ripple to offer more in-house services, particularly to financial institutions seeking to tokenize assets. According to a spokesperson, the addition of Standard Custody’s licenses is a strategic move for Ripple, providing vital compliance capabilities to complement its blockchain technology offerings for financial institutions. 

Monica Long, President of Ripple, emphasized the significance of expanding infrastructure offerings to financial institutions, stating,

“We want to offer more and more of these infrastructure pieces to these financial institutions. We see this as giving us a lot of flexibility.”

She described the acquisition as a long-term project, indicating Ripple’s ongoing efforts to complete the remainder of its U.S. money transmission licensing. Long added;

“Being able to provide not just the technology component to financial institutions that want to use blockchain…you also need a compliance piece. And so these licenses are really key to us being able to deliver that full end-to-end solution.”

Expansion of the European Custody Team and Partnerships

Despite Ripple’s legal battles with the SEC over accusations regarding XRP’s classification as a security, Long emphasized that the company’s focus on the U.S. market is driven more by regulatory uncertainty surrounding digital assets than by specific legal disputes. Long expressed optimism about the potential for the U.S. to emerge as a leader in driving innovation in the digital asset space.

Standard Custody, a subsidiary of digital asset infrastructure firm PolySign, raised $53 million in Series C funding in June 2022, underscoring its position as a significant player in the digital asset custody space. Standard Custody specializes in digital asset custody, escrow, and settlement services for institutional clients, having secured approval for a New York trust license in May 2021.

Ripple’s acquisition underscores its commitment to expanding its regulatory foothold, particularly in the U.S. and Europe. This acquisition follows its previous deal, in which it acquired another cryptocurrency custody firm, Metaco.

Notably, Ripple has been actively bolstering its European custody team and has established partnerships with prominent financial institutions across five continents. Notable clients include HSBC, DekaBank, VP Bank, and DZ Bank in Germany, along with Société Générale, BBVA Switzerland, DBS, and Zodia Custody.

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Crypto exchange Kraken published a report today detailing the data requests it received from official bodies last year.

In a blog post, the exchange revealed that it had received a total of 4923 data requests in 2023, with U.S. agencies accounting for 1393 of those requests.

Stay in-the-know with the 2023 Kraken Transparency Report

Last year:

– Agencies from 69 countries submitted data requests

– U.S. agencies issued 28.2% of all data requests

– Worldwide global regulatory agency requests increased 70%

Full report https://t.co/Mir67JMrPb

— Kraken Exchange (@krakenfx) February 12, 2024

Kraken’s 2023 Transparency Report

The Federal Bureau of Investigation stood out as the most proactive among U.S. agencies, making up more than 33% of total requests. Although comprising only 1.8% of overall U.S. agency requests, the Securities and Exchange Commission (SEC) played a major role by accounting for almost 60% of regulatory agency requests in the country, Kraken noted.

The exchange observed a 33% rise in the total number of requests from global law enforcement and regulatory agencies in 2023 compared to 2022. The British Virgin Islands and Australia saw the biggest increases, with spikes of 400% and 341%, respectively.

Kraken received data requests from law enforcement and government agencies located in 69 countries in total, with the most common type of request being a subpoena.

“Consistent disclosure of compliance information demonstrates our longtime commitment to complying with legal and regulatory requests in a way that is consistent with law enforcement and aligns with our ideals: financial freedom, permissionless access to assets, and the acceleration of global crypto adoption — with a vigilant commitment to regulatory compliance and our clients’ privacy,” Kraken said in its blog post.

Coinbase and Kraken’s Legal Issues 

Coinbase, another prominent crypto exchange, disclosed that it received a total of 13,079 requests from law enforcement agencies between October 2022 and September 2023, reflecting a 6% increase from the previous year.

The extent of data provided by Coinbase to law enforcement is unclear, but the exchange expressed its commitment to providing “anonymized or aggregated data.”

In November 2023, the SEC filed a lawsuit against Kraken, alleging that the exchange functioned as an unregistered securities business. The SEC further accused Kraken of commingling its own funds with those of its customers. In response, Kraken asserted that it does not list securities and contested the allegations made in the complaint.

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