In a surprising turn of events, Ripple, the fintech company known for its cryptocurrency XRP, has announced its decision to withdraw from the planned acquisition of Fortress Trust, just 20 days after initially revealing the acquisition. Ripple’s CEO, Brad Garlinghouse, took to X (formerly Twitter) to convey the decision, stating that they had opted not to proceed with the acquisition as initially planned.
The Fortress Trust acquisition, which aimed to expand Ripple’s array of licenses in the United States, was initially unveiled on September 8, catching many, including those within the company, off guard. Ripple’s original announcement included plans to acquire other companies within the Fortress group, including affiliated firm FortressPay.
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_io.
— Brad Garlinghouse (@bgarlinghouse) September 28, 2023
However, just days later, Fortress Trust admitted that the acquisition had been hastily arranged in response to a security incident involving a third-party analytics vendor. This incident resulted in a substantial loss of $12 million to $15 million, primarily in Bitcoin (BTC), with smaller amounts in USD Coin (USDC) and Tether (USDT). Ripple, a longstanding investor in Fortress since its seed round in 2022, stepped in to reimburse affected customers.
Brad Garlinghouse clarified that despite the change in acquisition plans, Ripple would maintain its role as a shareholder in Fortress Trust’s parent company, Fortress Blockchain Technologies. This development comes as Ripple continues to navigate its high-profile legal battle with the United States Securities and Exchange Commission.
