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In a surprising twist, Ripple has announced its decision to step back from its planned acquisition of crypto-focused company Fortress Trust. The news came from Ripple’s CEO, Brad Garlinghouse, who took to X, formerly Twitter, to share the development.
“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,” tweeted Garlinghouse.
Garlinghouse however expressed his admiration for the talented Fortress Trust team and their track record of solving genuine customer challenges through innovative product offerings. He underscored that while the outcome deviates from the original plan, Ripple remains committed to supporting Fortress Trust and remains open to future collaboration opportunities.
The Abandoned Acquisition
Ripple expressed its intent to acquire Fortress Trust in early September outlined the acquisition as a cash-and-equity deal, although specific financial details remained undisclosed. At the time, Ripple described Fortress Trust as a “financial institution that provides licensed Web3 financial, regulatory, and technology infrastructure for blockchain innovators.” Ripple’s initial interest in acquiring the company was driven by its recognition of the team’s vision and technology.
Notably, Ripple had previously invested in Fortress, which led to its decision to pursue the acquisition. At the time of the initial announcement, Garlinghouse emphasized the strength of Fortress Trust’s business model, highlighting recurring revenue and a diverse clientele, ranging from crypto-native users to those new to the world of cryptocurrencies.
Security Concerns?
The decision to abandon the acquisition coincides with a period of notable developments for Fortress Trust. Shortly after the acquisition plans were revealed, a security breach facing the company and resulting in the loss of approximately $15 million worth of cryptocurrencies was disclosed, Coingape reported. However, Scott Purcell, the company’s CEO later assured that the losses were promptly covered.
That said, in response to the latest development, iTrust Capital, a strategic partner of Fortress Trust reaffirmed that Fortress is continuing its operations as usual, unaffected by the change in direction. The firm also assured clients that there would be no immediate impact on their operations adding, “As always, we will continue to review alternative vendor options and have redundancies in place.”
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