Ripple’s $500 million share sale included investor protections guaranteeing profits: Bloomberg

Ripple's recent $500 million share sale, which valued the company at $40 billion and included major investors like Citadel Securities and Fortress Investment Group, featured investor protections that effectively guaranteed profits. These protections grant investors the right to sell their shares back to Ripple after three or four years at a 10% annualized return, unless Ripple goes public sooner. Conversely, if Ripple chooses to repurchase the shares early, it must offer investors a 25% annualized return. The deal also included a liquidation-preference clause favoring new investors in case of bankruptcy or sale. Investor documents indicated that participating funds viewed the investment as a bet on XRP's performance, as 90% of Ripple's net asset value was assessed to derive from the token. This mechanism is similar to downside protection offered in other recent crypto-related investments.

(Source：The Block)