Ripple brushes Fortress Trust acquisition plans off the table.
Just weeks after announcing plans to buy Fortress Trust to broaden its US licensing portfolio, fintech leader Ripple has unexpectedly backed out of the acquisition.
The unexpected turn of events was confirmed by Ripple CEO Brad Garlinghouse on social media platform X (formerly Twitter) on September 28th.
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Garlinghouse indicated that although the acquisition is off the table, Ripple would still hold a stake in the parent company, Fortress Blockchain Technologies.
Initially announced on September 8th, Ripple’s acquisition proposal surprised the public and those within the company. At the beginning of the month, Ripple also hinted at its intention to make further investments in other companies under the Fortress umbrella, including its payment subsidiary, FortressPay.
Fortress Trust’s CEO Scott Purcell later revealed that a cybersecurity incident influenced their decision to agree to the acquisition. The security breach, involving an external analytics service, led to a loss of up to $15 million in Bitcoin (BTC), USD Coin (USDC) and Tether (USDT).
When asked to comment on the terminated deal, Purcell said it wasn’t a significant concern. He further clarified that the change in acquisition plans had no connection to the recent security breach, stating:
They are an investor in Fortress and a great partner. Nothing changes there.
Despite contacting Ripple for additional commentary, the company decided not to delve into conversation beyond their CEO’s initial public statement.
This pivot occurs as Ripple remains entangled in a high-stakes legal face-off with the US Securities and Exchange Commission. The breakdown of the acquisition deal may inadvertently benefit other firms associated with Fortress.
Ripple has abruptly halted its planned acquisition of Fortress Trust just 20 days after announcing the deal. The decision leaves Fortress’s existing partnerships intact and adds a new twist to Ripple’s ongoing legal and investment saga.