Ripple has announced that it will not proceed with its outright acquisition of Nevada-based leasehold trust company Fortress Trust. Ripple’s CEO Brad Garlinghouse said that they will remain only as investors in Fortress Trust.
Ripple gave up buying Fortress Trust!
Financial technology firm Ripple announced that it has acquired Fortress Trust, claiming to expand its licensing pool in the United States. However, this agreement did not last long. Ripple announced that it was withdrawing from the agreement 20 days after this announcement. Ripple CEO Brad Garlinghouse made a statement regarding the issue on his X account on September 28. Garlinghouse first stated that Ripple will remain a shareholder in Fortress Trust’s parent company, Fortress Blockchain Technologies. However, he stated that they gave up moving forward with a direct acquisition. In this context, Garlinghouse shared the following statement:
A few weeks ago we signed a letter of intent to acquire Fortress Trust. We have since decided not to move forward with a direct acquisition. However, Ripple will remain an investor in Fortress.
A few weeks ago, we signed a letter of intent to acquire Fortress Trust – we’ve since made the decision not to move forward with an outright acquisition, though Ripple will remain an investor in @Fortress_io.
— Brad Garlinghouse (@bgarlinghouse) September 28, 2023
Fortress CEO: Ripple cancellation is not a big deal!
cryptokoin.comAs you follow from, Ripple first announced the acquisition on September 8. This development surprised even those within the company. At the time, Ripple announced plans to acquire other companies in Fortress’ group, including FortressPay, a Fortress subsidiary. A few days later, Fortress Trust acknowledged that the purchase was rushed due to a security incident involving a third-party analytics vendor. In an interview with Fortune, Fortress CEO Scott Purcell said the company lost $12 million to $15 million in the attack. The bulk of the funds were Bitcoin (BTC) and small amounts of USD Coin (USDC) and Tether (USDT).
Ripple has been an investor in Fortress since its seed round in 2022. After the hacking incident, he had to step in to win over all the customers. Scott Purcell said in a statement that the merger cancellation was “not a big deal.” According to him, the change of plan has nothing to do with the security incident. “They are an investor and a great partner in Fortress, nothing is changing there,” Purcell said.
Will Fortress suffer from this?
Ripple continues its high-profile legal battle with the US Securities and Exchange Commission. In this environment, it’s possible that the deal’s failure could benefit other companies linked to Fortress.
For example, Swan Bitcoin is working on a joint venture with BitGo to launch a Bitcoin-only trust company in the US. This initiative is awaiting regulatory approval. Fortress Trust maintains records for Swan. Since the deal collapsed, Swan will no longer be involved in Ripple’s business in the country.
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