Ripple Withdraws from Fortress Trust Acquisition After Only 20 Days
Summary:
Fintech company Ripple has announced the decision to retract from its previously announced acquisition of Fortress Trust, just 20 days after it was declared. Brad Garlinghouse, Ripple’s CEO, confirmed the news, specifying that Ripple will continue to be an investor in Fortress Trust's parent company, Fortress Blockchain Technologies. The abrupt decision does not relate to the recent security breach incident, and other companies tied to Fortress, such as Swan Bitcoin, may potentially benefit from it.
Just 20 days after proclaiming its intent to purchase Fortress Trust in an attempt to bolster its U.S. license portfolio, fintech company Ripple has decided to withdraw from the transaction. The company's CEO, Brad Garlinghouse, made the revelation via the X platform (previously known as Twitter) on September 28. His statement declared, "we've subsequently selected to discontinue pursuing the outright acquisition," though Ripple intends to maintain its stake in Fortress Trust's parent organization, Fortress Blockchain Technologies. Ripple initially made public the acquisition on September 8, startling even those within the corporation, according to information obtained by Cointelegraph. At that point, Ripple had visions of acquiring further businesses within the Fortress conglomerate, including FortressPay. Shortly after, Fortress Trust admitted that a security event involving a third-party analytic provider resulted in a hasty acquisition. During a discussion with Fortune, Scott Purcell, CEO of Fortress, disclosed that the company sustained losses between $12 million and $15 million as a result of the breach. Most of the losses were composed of Bitcoin (BTC), with minor amounts of USD Coin (USDC) and Tether (USDT). Ripple, a Fortress backer since its 2022 seed round, had to intervene to reimburse customers.
In a conversation with Cointelegraph, Purcell indicated that the halted merger was "not a significant concern." He asserted that the modification to plans has no connection to the security breach and emphasized that Ripple remains a valuable partner and investor in Fortress. Ripple did not provide any additional commentary beyond what was posted on X by Garlinghouse. As Ripple proceeds with its well-publicized lawsuit against the U.S. Securities and Exchange Commission, the stalled deal might prove advantageous for other companies affiliated with Fortress. Swan Bitcoin, for example, is in the process of joining forces with BitGo to establish a Bitcoin-exclusive trust firm in the U.S., pending regulatory approval. Fortress Trust plays the role of record custodian for Swan. With the deal falling through, Swan will no longer partake in Ripple's U.S. operations.
Published At
9/28/2023 7:16:45 PM
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