Almost 20 days after the announcement of the acquisition, Ripple has made the decision to pull out from the Fortress Trust deal. The CEO of Ripple, Brad Garlinghouse, announced in his tweet that the platform has decided not to move ahead with the outright acquisition as they planned before, but Ripple would continue to remain as a shareholder in Fortress Trust’s parent company, Fortress Blockchain Technologies.
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
Ripple, the creators of the Ripple (XRP) cryptocurrency first announced the acquisition earlier this year, and it ended up surprising many including company insiders. During that same time, the crypto protocol expressed its plans to invest in other Fortress group companies, which includes FortressPay. According to an insider, the price at which the company planned to buy Fortress was less than the $250 million mark.
Ripple Backs Off – What Does it Mean for Fortress?
Just a few days after making the announcement, Fortress Trust acknowledged that the whole acquisition scenario was rushed as the result of a security incident that involved a third-party analytics vendor. In one of the company’s interviews, the CEO of Fortress, Scott Purcell, made it evident that the company lost almost $12 million to $15 million as a result of the attack. The majority of the funds lost included Bitcoin whereas smaller amounts of USDC and USDT were lost.
As a result of this loss, Ripple decided to step in and make the customers whole. Furthermore, Purcell also mentioned that the cancellation of the acquisition is not a big deal, and it does not really have anything to do with the security incident. He also reassured the masses that Ripple was just an investor in Fortress and that nothing would change that.
It is a fact that Ripple has been engaged in an intense legal battle with the SEC for quite a while now. Following the cancellation of the acquisition deal, many believe that this might benefit other companies that are associated with Fortress.
Swan Bitcoin, for example, is currently working on a joint venture with BitGo in hopes of creating a Bitcoin-only trust company within the US, which is currently waiting for approval from the authorities. Fortress Trust provides custody of records for Swan. Considering how the deal collapsed. Swam would no longer have any reason to stay involved in Ripple’s business in the country.