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Ripple structured its November funding round to ensure minimum returns for institutional investors by incorporating various contractual protections.

Ripple provided participants, such as Citadel Securities and Fortress Investment Group, with put options and liquidation preferences. Investors can sell their shares back to Ripple after three or four years at a guaranteed 10% annual return, unless an IPO occurs.

The company has retained buyback options at the same intervals; however, if these options are exercised early, it would result in a 25% annualized return obligation for Ripple. In the case of an acquisition or bankruptcy, liquidation clauses prioritize new investors over existing shareholders. To repurchase the entire stake at the minimum return rate after four years, Ripple would need to pay approximately $732 million.

Other participants in this funding round included Marshall Wace, Brevan Howard, Galaxy Digital, and Pantera Capital, all of whom valued the company at $40 billion. Investors sought protection against potential downside risks.

According to due diligence materials, participating funds have concluded that Ripple’s XRP holdings account for at least 90% of its net worth. This investment effectively depends on the token’s appreciation while offering protection against unfavorable outcomes thanks to guaranteed exit options.

Ripple had $124 billion in XRP holdings as of July’s corporate disclosures, with a sizable portion either locked in escrow or released in accordance with predetermined schedules. The token’s value has decreased by more than 40% from its peak in July and by about 16% since the funding round was announced in late October.

Earlier this year, Brevan Howard’s investment in Berachain included similar protective arrangements. The traditional finance sector’s appetite for cryptocurrency exposure, coupled with contractual safety nets, was evident in that deal, which featured a $25 million refund mechanism that offered recourse under certain conditions.