Ripple’s $500 million raise shows Wall Street caution with its XRP-heavy holdings: Report

Ripple’s latest fundraise at a $40 billion valuation drew elite investors, but the terms reveal great caution about the risks in the crypto sector, Bloomberg said Monday.

As reported, investors have negotiate a set of terms that allow them to sell their shares back to Ripple after three or four years at a higher predetermined price, effectively guaranteeing profits unless the company goes public before that point.

Citadel Securities was among the investors participating in the financing round with these profit-protection provisions.

Many investors believe Ripple’s value is anchored almost entirely to XRP, which has dropped considerably during the latest crypto market downturn. These conditions could create major financial obligations for Ripple in the future as it works to reduce its dependence on a single token.