- Ripple has unexpectedly withdrawn from its planned acquisition of crypto custodian Fortress Trust
- The acquisition was announced on September 8, with Ripple initially citing Fortress Trust’s valuable Nevada license and strong customer base as key attractions.
- Fortress Trust revealed that it had suffered a hack shortly after the acquisition, although the breach targeted a third-party service rather than Fortress Trust itself
Ripple had decided to back out of its purchase of crypto custodian Fortress Trust less than a month after the move was publicised but has not given a reason. Ripple had been attracted by Fortress’ Nevada license which would have allowed it to expand beyond its core offering of blockchain-enabled payments, but the company has pulled out without giving a reason, although it will retain a financial interest. Ripple’s acquisition of Fortress Trust was announced shortly after Fortress Trust was hacked for between $12 to $15 million.
Ripple Wanted to Utilize Fortress’ License
Ripple announced its purchase of Fortress on September 8, with Brad Garlinghouse, CEO of Ripple, saying that Fortress had built “an impressive business with recurring revenue and a strong roster of both crypto-native and new-to-crypto customers. Garlinghouse added that Ripple was excited to “bring on this team and its technology to accelerate our business and continue pressing our advantage in the areas critical to crypto infrastructure.”
Shortly after the purchase, it was clarified that the hack on Fortress had targeted a third-party service rather than Fortress Trust itself. CEO Scott Purcell expressed his intention to eventually repay Ripple the $15 million once they collect it from the third party responsible for the breach.
It isn’t clear what has changed in the relationship between Ripple and Fortress, with Garlinghouse revealing on X that the buyout was dead:
The Fortress team is incredibly talented, and has built products solving real customer problems. While this outcome is different from what was originally planned, we’ll continue to support them and hope to work together in the future!
— Brad Garlinghouse (@bgarlinghouse) September 28, 2023
Fortress has not commented on the collapse of the deal, but it must now find the money to repay the affected clients itself and potentially look for a new buyer.