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Ripple Prime, the institutional prime brokerage that Ripple acquired through its purchase of Hidden Road, is financing leveraged stock exchange-traded funds and charging a fee for it. CoinDesk reported on Oct. 8, 2026 that one such fund, the Tradr 2X Long SNDK Daily ETF, pays Ripple the overnight bank funding rate plus four percentage points on its swap exposure. The arrangement is a financing charge, not a trading commission, and it puts a non-bank firm in a function that banks have traditionally performed. Ripple has not disclosed how much of its revenue comes from this activity.
How the financing works
A leveraged ETF promises a multiple of a stock’s or index’s daily move, such as twice the daily movement of Sandisk. The fund could buy the underlying shares in amounts sized to that multiple, but many funds instead use a total return swap. Ripple Prime’s product page describes its Delta One products as delivering an asset’s return without the investor directly holding the asset, typically through a total return swap.
- The fund asks for exposure. The ETF wants twice the daily return of a stock without buying twice the stock.
- The prime broker supplies the exposure. Ripple Prime takes the other side of the swap, so the fund receives the economic return of the stock.
- The broker manages its own risk. To hedge the position it has taken on, the broker enters other trades. Those trades are where its real market exposure sits.
- The fund pays a financing charge. The charge is calculated on the swap exposure and is separate from the fund’s management fee.
The reported fee example, line by line
CoinDesk’s report is the only source for the specific Sandisk example, so the figures below describe one reported transaction, not a standing price list.
| Component | Reported term | Qualification |
|---|---|---|
| Fund | Tradr 2X Long SNDK Daily ETF | Targets twice the daily movement of Sandisk |
| Benchmark | Overnight bank funding rate | Floats with rates, so the charge moves over time |
| Spread | Plus 4 percentage points | Reported by CoinDesk, 2026 |
| All-in estimate | Roughly 8% annualized | CoinDesk’s estimate at prevailing rates on Oct. 8, 2026 |
| Management fee | Not stated | Charged separately from the financing fee |
The arithmetic is worth doing. If the spread is 4 points and the all-in estimate is about 8%, the overnight benchmark on that day was roughly 4%. That is an inference from CoinDesk’s estimate, not a published rate. The number will change as the benchmark moves, which is why the 8% figure should be read as a snapshot.
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Why banks are in the comparison
Banks have historically supplied much of the financing behind leveraged ETFs. CoinDesk reports that tighter capital and risk requirements have opened room for non-bank firms, and it names Ripple Prime, Jane Street, and Clear Street as examples. The comparison is about the business function, financing leveraged positions, not a claim that Ripple is a bank.
Ripple’s own framing is that a non-bank structure avoids the capital constraints that bank balance sheets face. That is the company’s position, and it has not been independently tested. Ripple also says Ripple Prime is an institutional service and does not serve retail clients. Ripple Prime’s chief executive-level voice, Noel Kimmel, President of Ripple Prime, put the business case this way in Ripple’s May 11, 2026 announcement: “Dependable access to financing and balance sheet strength are critical to institutional participants in today’s dynamic markets.”
How Ripple Prime got here
Ripple’s activity in this market has developed through a sequence of acquisitions, product launches, and financing announcements. Each item below is company- or press-reported and should be read on its own terms.
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Acquisition of Hidden Road
Ripple acquired Hidden Road, a multi-asset prime brokerage, for $1.25 billion. CoinDesk reports the price, and the acquisition closed in October 2025. The business now operates as Ripple Prime.
U.S. institutional spot trading and cross-margining
Ripple’s Nov. 3, 2025 announcement described U.S. institutional over-the-counter spot trading. It also said clients can cross-margin digital-asset spot holdings against OTC swaps and CME futures and options. That describes the broader institutional service. It does not establish that the leveraged stock ETF example uses XRP or settles on the XRP Ledger.
Debt facility and revenue growth
On May 11, 2026, Ripple disclosed a debt facility of up to $200 million from funds managed by Neuberger Specialty Finance. Ripple said the proceeds are intended to expand client financing capacity. The figure is facility capacity, not evidence that the full amount has been drawn. Ripple also said Ripple Prime revenue had tripled year over year since its 2025 acquisition of the platform. That is a company-reported total and does not isolate the leveraged ETF business.
What a single counterparty offers
Ripple describes Ripple Prime as bundling trading, clearing, financing, and risk management into one counterparty. Its product page says its platform spans digital assets, FX, listed derivatives, swaps, and fixed income, and offers portfolio financing and risk-based margin financing. It also describes cross-margining across asset classes, so a client can use a shared collateral pool.
Ripple’s product page puts the pitch this way: “Prime brokerage bundles trading, clearing, financing, and risk management into one relationship, so institutions access markets through a single counterparty instead of separate arrangements with every venue and lender.” That is company-authored explanation. Claims about capital efficiency from shared collateral are Ripple’s own and have not been independently measured.
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Leveraged ETFs reset their exposure daily. That reset is what makes the multiple work, and it is also what can strain the firm on the other side of the swap. A sharp move in the underlying stock can leave a financing firm exposed if the fund’s assets are not enough to cover its losses. Ripple’s counterparty position in the Sandisk example therefore depends on how collateral, margin calls, and close-outs are handled, and CoinDesk’s reporting does not give those terms for the cited swap.
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Questions a reader or analyst should ask about any provider in this space include:
- What collateral is posted, how often it is re-marked, and who can call for more.
- What happens if the fund’s assets fall below what is needed to cover losses on the swap.
- Whether the same collateral pool backs other positions, and how cross-margining changes that exposure.
- How quickly the broker can unwind its hedges if markets gap.
Market scale and what is still unknown
CoinDesk, citing Morningstar Direct data, reports that 593 leveraged ETFs hold more than $256 billion, including 426 funds that track individual stocks. Those figures describe the market, not Ripple’s share of it. Morningstar Direct is the underlying data source; CoinDesk reported the figures.
Three things are not established by the reporting reviewed. First, Ripple has not disclosed revenue from leveraged ETF financing, so the business cannot be sized from public figures. Second, Ripple has not disclosed what proportion of this activity uses XRP or the XRP Ledger. Third, no independent review has verified Ripple’s performance claims, and the swap contract itself has not been published.
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Institutional financing beyond stocks
In a separate announced initiative, Ripple and DBS and Franklin Templeton described a memorandum of understanding involving tokenised money market funds and RLUSD. The announcement is dated Sept. 18, 2025. DBS said it would explore whether sgBENJI fund units could serve as collateral for bank credit or third-party lending. That collateral-credit element is exploratory. It is not evidence that leveraged stock financing runs on-chain, and it does not establish that such lending is broadly available.
How to compare financing providers
A fair comparison of this business has to hold the same axes constant across providers. The table below separates what the reporting establishes for Ripple Prime from what it does not.
| Axis | Established for Ripple Prime | Not established |
|---|---|---|
| Balance sheet | Non-bank institutional prime broker, per Ripple | Bank competitors’ capital terms not stated in reporting reviewed |
| Products | Digital assets, FX, listed derivatives, swaps, fixed income | Product overlap with bank rivals not quantified |
| Collateral and cross-margin | Shared collateral pool across asset classes, per Ripple’s product page | Collateral and margin terms for the Sandisk swap not stated |
| Financing spread | Overnight bank funding rate plus 4 points in one reported example | Pricing for other Ripple clients and for named bank competitors not stated |
| Counterparty and market-move risk | Hedging through other trades, per CoinDesk | Close-out procedures and liquidity depth not stated |
What this means for a leveraged ETF holder
Most shareholders never sign a swap, but the financing cost is part of what the fund must cover to deliver its stated multiple. Because the charge is separate from the management fee, a fund’s total cost structure can be higher than its headline expense ratio suggests. Holders who want to see that cost should look at the fund’s prospectus and annual report for how it describes swap financing, rather than relying on the expense ratio alone.
Readers who want the next step in this market should follow Ripple’s own announcements and the fund’s disclosures for updates on collateral terms, the size of the Neuberger-backed facility’s drawn balance, and any disclosure of Ripple Prime revenue by business line.
The Bottom Line
Ripple Prime is earning a financing fee on leveraged stock exposure, and the business is part of a shift in which non-bank firms are competing for work banks once dominated. The public record supports that picture in outline. It does not yet show how large the leveraged ETF piece is, what collateral terms apply, or how much of it touches XRP.
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