Ripple is collecting roughly 8% a year from a fund that aims to deliver double the daily performance of Sandisk shares. The arrangement puts the crypto company in a part of Wall Street that big banks and securities firms have controlled for a long time.
According to a Wednesday report from The Wall Street Journal, Ripple Prime, the company’s prime brokerage arm, is providing financing to leveraged exchange-traded funds. Investors use these funds to amplify the daily moves of individual stocks and market indexes.
How the plumbing works
A leveraged ETF can get its exposure without buying twice its assets in the underlying stock. Consider a fund built to return double Nvidia’s daily performance. Rather than buying the extra Nvidia shares, it can enter into an agreement known as a total return swap.
A broker takes the other side of that agreement and supplies the exposure. The broker typically hedges its own risk by buying the stock or placing other trades, and it bills the fund a financing fee. Ripple’s income comes from that fee.
The 8% number
The Journal said the Tradr 2X Long SNDK Daily ETF, which aims for twice the daily movement of memory-chip maker Sandisk, pays Ripple the overnight bank funding rate plus four percentage points. That benchmark reflects what banks pay to borrow overnight.
Based on current rates, the annualized financing cost works out to about 8%. The charge applies to the swap exposure and comes on top of the ETF’s management fee. Investors in a fund like this therefore pay for leverage twice, and only one of those costs appears on the fact sheet as a management fee.
Why a crypto firm can get in
The market is sizable. Morningstar Direct data show that the U.S. now has 593 leveraged ETFs with more than $256 billion in assets, and 426 of them track individual stocks.
Much of the financing for these products has come from banks. Stricter capital and risk rules, however, have created an opening for nonbank firms such as Ripple Prime, Jane Street and Clear Street.
Ripple didn’t start this business from nothing. In October 2025 it spent $1.25 billion to acquire Hidden Road, a multi-asset prime brokerage. The purchase gave Ripple an existing operation that clears trades, finances investment positions and processes transactions in stocks, bonds, currencies and digital assets.
In August, Ripple followed up by launching its Delta One business, which provides total return swaps linked to U.S. stocks, market indexes and digital assets. At the time, the company said the unit held more than $1 billion in regulatory net capital and that it had completed a $275 million senior debt offering to fund further growth.
On Tuesday, Ripple also announced a broader agreement with hedge fund manager Brevan Howard, under which Ripple Prime will provide brokerage, clearing and financing services across multiple asset classes.
The risk isn’t theoretical
Leveraged ETFs reset their exposure every day. If one stock swings hard and the fund lacks the assets to absorb the losses, the financing firm on the other side of the swap can end up holding the exposure.
That risk is the price of the fee income. The business also links Ripple’s revenue to stock trading and institutional financing, which is far from its roots in cross-border payments.
Ripple has not said how much revenue its leveraged ETF financing generates. It also hasn’t disclosed how much of that activity involves XRP or the XRP Ledger. XRP holders who want to know what a Sandisk swap means for their token don’t have an answer from Ripple yet.