Ripple’s Fortress Trust Acquisition Now Collapsed After Nearly 3 Weeks Of Agreement
- Ripple’s Fortress Trust acquisition collapsed, just weeks after announcing expansion plans in the United States.
- The cryptocurrency theft incident at Fortress Trust may have influenced the decision.
- Ripple’s legal challenges and acquisition reversals reflect a changing crypto landscape.
Financial technology giant Ripple has opted to withdraw from its proposed acquisition of Fortress Trust, marking a significant turn of events just 20 days after announcing the expansion initiative.
Ripple’s Fortress Trust Acquisition Abandoned
The decision, revealed by Ripple CEO Brad Garlinghouse via the X platform (formerly Twitter) on September 28, came as a surprise to many. Garlinghouse stated:
“While this outcome is different from what was originally planned, we’ll continue to support them and hope to work together in the future!”
Ripple will not proceed with the outright acquisition but will remain a shareholder in Fortress Trust’s parent company, Fortress Blockchain Technologies.
This move follows Ripple’s earlier announcement on September 8, expressing its intention to acquire Fortress Trust, albeit without disclosing the purchase price. Sources close to the matter indicated that the deal’s value was less than the $250 million Ripple paid for custody firm Metaco in May.
However, the decision to abandon Ripple’s Fortress Trust acquisition may have been influenced by recent developments. A day before the acquisition announcement, Fortress Trust disclosed a cryptocurrency theft amounting to nearly $15 million, attributing it to an unnamed third-party vendor’s phishing attack. Ripple had previously agreed to cover losses resulting from a third-party security incident as part of the deal.
Ripple’s Ongoing Legal Battle and Its Ripple Effect in the Industry
Ripple’s ongoing legal battle with the United States Securities and Exchange Commission adds a layer of complexity to its business decisions, and the failure of this acquisition could potentially benefit other companies with ties to Fortress.
Ripple’s Fortress Trust acquisition breaks down closely on the heels of BitGo’s withdrawal from a similar deal to acquire custodian Prime Trust, highlighting the volatility and uncertainty within the cryptocurrency and fintech sectors.
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