Ripple Backtracks On Corporate Acquisition

September 29, 2023 2:32 pm Comments

Following a hack that occurred earlier this month, Ripple Labs backed out of earlier plans to purchase Fortress Trust.

Despite having signed a letter of intent, Ripple Labs will no longer be moving forward with taking Fortress over. Ripple CEO Brad Garlinghouse posted this statement online:

“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.

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!” 

Cryptocurrency reporter Zack Rector broke down the recent backpedaling on the deal in one of his latest videos.

The Block had more on the story:

Ripple previously announced the intended deal to acquire Fortress Trust on Sept. 8, planning it to use its payments tech for FortressPay, just a few months after it splashed $250 million on Swiss custody startup Metaco.

Ripple later confirmed it covered losses suffered by customers of the blockchain infrastructure startup after a third-party security incident as part of the deal.

Colin Wu reported that Fortress Trust suffered a hack earlier this month:

“Retool has released details of a hack involving 27 crypto accounts, including how $15 million in cryptocurrency was stolen from Fortress Trust.

Google Authenticator cloud sync function was the reason, the attacker took control of the Google account, thereby controlling the data stored on Google Authenticator.”

Crypto investor and podcast host Scott Melker remarked: “Prime Trust committed fraud. Bitgo intended to acquire them but backed out after due diligence Scott Purcell left PT to form Fortress. Fortress lost customer funds. Ripple just backed out of the deal to buy Fortress. Not great.”

Coin Telegraph noted Fortress CEO Scott Purcell’s response:

In comments to Cointelegraph, Purcell said the merger’s cancelation “is not a big deal.”

According to him, the change in plans is unrelated to the security incident. “They are an investor in Fortress and a great partner. Nothing changes there,” he noted.

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