Ripple Halts Acquisition Plans for Fortress Trust, Maintains Shareholding

In a surprising turn of events, a financial technology firm has decided to withdraw from its planned acquisition of Fortress Trust. This announcement was made by Ripple’s CEO, Brad Garlinghouse, on Thursday, September 28, 2023, just weeks after the acquisition was initially disclosed on September 8, 2023.

While Ripple will not pursue the acquisition, it will retain its status as a shareholder in Fortress Blockchain Technologies, the parent company of Fortress Trust. This unexpected change in direction took many within Ripple by surprise.

The initial acquisition announcement had garnered significant interest within the cryptocurrency community, as it was viewed as a strategic move for Ripple’s expansion in the U.S., particularly due to Fortress’s Nevada Trust license.

However, a security incident involving a third-party analytics vendor, which resulted in losses estimated between $12 million and $15 million for Fortress Trust, prompted Ripple to step in and compensate affected customers. Most of the lost funds were in Bitcoin, with smaller amounts in USDC and USDT.

Despite this setback, Scott Purcell, CEO of Fortress Trust, described the cancellation of the merger as “not a big deal” and insisted it was not related to the security incident, reaffirming that Ripple remains a valued investor and partner.

Ripple’s decision to abandon the acquisition could open doors for other firms associated with Fortress. Swan Bitcoin is currently pursuing a joint venture with BitGo to establish a Bitcoin-only trust company in the U.S., which is awaiting regulatory approval. With Ripple stepping back from Fortress Trust, Swan will no longer be affiliated with Ripple’s operations in the country.

Meanwhile, Ripple is engaged in a prominent legal battle with the U.S. Securities and Exchange Commission. Although it has experienced a slight downturn in the past 24 hours with just a 0.3% increase, Ripple’s token XRP still ranks as the fifth-largest cryptocurrency, currently trading at approximately $0.5056.