Ripple has withdrawn from its announced acquisition of Fortress Trust just 20 days after announcing the deal. The abrupt change of plans was confirmed by Ripple CEO Brad Garlinghouse on X (formerly Twitter) on September 28. Garlinghouse emphasized that even though they’ve decided not to proceed with the acquisition, Ripple will maintain its shareholder status in Fortress Blockchain Technologies, the parent company of Fortress Trust.
The acquisition’s announcement on September 8 had taken many by surprise, including those inside the company. Ripple had disclosed plans to invest in other companies within the Fortress group, including the affiliated firm FortressPay. This move was later understood to be hastened by a security incident involving a third-party analytics vendor, causing Fortress to lose $12 million to $15 million. A significant portion of the lost funds was in Bitcoin, along with minor amounts in USD Coin and Tether. Ripple, an investor in Fortress since 2022, intervened to compensate the customers.
Despite the setback, Scott Purcell, the CEO of Fortress, downplayed the situation, asserting that the cancellation of the merger is not a significant issue and is not related to the security incident. He reaffirmed the partnership with Ripple, highlighting that their investor and partner status remains unchanged.
Although Ripple declined to provide additional comments beyond its CEO’s post, the dissolution of the deal may present opportunities for other companies associated with Fortress. One such company, Swan Bitcoin, is in the process of establishing a joint venture with BitGo to form a Bitcoin-only trust company in the U.S., pending regulatory approval. With the deal’s termination, Swan will no longer have any involvement in Ripple’s operations in the U.S., potentially simplifying its regulatory pathway.
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