Ripple is expanding its prime brokerage business into leveraged stock ETF financing, entering a market where banks and major securities firms have traditionally provided much of the funding.

The move stems from Ripple’s $1.25 billion acquisition of Hidden Road, which gave the crypto company an established presence in a Wall Street business where investment funds pay financing costs to increase their exposure to daily moves in stocks such as Nvidia and Sandisk.

Ripple Prime, the company’s prime brokerage arm, is financing funds that use products designed to magnify the daily performance of individual stocks and market indexes, the Wall Street Journal reported Wednesday.

Ripple acquired Hidden Road in October 2025. The multi-asset prime brokerage firm brought capabilities for clearing trades, financing positions and processing transactions across equities, bonds, currencies and digital assets.

Leveraged funds can use total return swaps to obtain amplified exposure without buying a corresponding amount of the underlying shares. A fund targeting twice Nvidia’s daily return, for example, can use a swap instead of purchasing twice its Nvidia holdings.

The broker supplies the exposure and typically hedges its position through stock purchases or other trades. It earns a financing fee in return.

The Journal reported that Tradr’s 2X Long SNDK Daily ETF, which targets twice the daily movement of memory-chip maker Sandisk, pays Ripple the overnight bank funding rate plus four percentage points.

At prevailing rates, that puts the annualized financing cost at roughly 8%. The charge applies to the swap exposure and is separate from the ETF’s management fee.

The U.S. leveraged ETF sector now includes 593 funds with more than $256 billion in assets, according to Morningstar Direct. Some 426 of those funds track individual stocks.

Banks have long supplied a large share of financing for leveraged products. But stricter capital and risk requirements have created room for nonbank firms, including Ripple Prime, Jane Street and Clear Street.

Ripple launched its Delta One business in August, offering total return swaps tied to U.S. stocks, market indexes and digital assets. The company said the unit had more than $1 billion in regulatory net capital and disclosed a $275 million senior debt offering intended to help fund additional growth.

Ripple is simultaneously expanding its institutional business. On Tuesday, it announced an expanded partnership with hedge fund manager Brevan Howard, with Ripple Prime set to provide brokerage, clearing and financing services across multiple asset classes.

Leveraged ETFs reset their exposure each day, creating potential risks for financing providers when sharp moves in individual stocks leave funds with insufficient assets to cover losses.

The financing business gives Ripple another source of fee income from institutional stock trading. However, the company has not disclosed how much revenue comes from leveraged ETF financing or whether the activity materially involves XRP or the XRP Ledger.