Ripple has confirmed that it no longer plans to acquire financial technology firm and crypto custodian Fortress Trust less than a month after claiming it would do so.
“We’ve since made the decision not to move forward with an outright acquisition, though Ripple will remain an investor in Fortress,” said Ripple CEO Brad Garlinghouse over X (Twitter) on Thursday.
Garlinghouse maintained that Fortress has a strong team behind it, building helpful products. “While this outcome is different from what was originally planned, we’ll continue to support them and hope to work together in the future,” he added.
In early July, Fortress CEO Scott Purcell was bullish on the deal, saying Ripple was “by far the best partner for us and our customers.” However, an internal disagreement over business priorities for Ripple caused it to hold off on acquiring Purcell’s firm.
“They are really just focused on pure B2B and institutional global business, Purcell told Decrypt on Thursday. “We were a way for them to diversify into B2B2C."
Ripple to Acquire Crypto Custodian Fortress Trust
Ripple announced on Friday that it intends to acquire Nevada-based Fortress Trust—a Web3-focused financial, regulatory, and technology infrastructure provider. “They’ve built an impressive business with recurring revenue and a strong roster of both crypto-native and new-to-crypto customers,” says Brad Garlinghouse, CEO of Ripple, in a press release. “We’re excited to bring on this team and its technology to accelerate our business and continue pressing our advantage in the areas critical to cryp...
“Many on their team were super excited about our tech and customer base but others pushed back to stay the current course,” he explained.
Purcell clarified that Fortress was aware of Ripple’s change of heart prior to the announcement and that both companies maintain a strong relationship with future plans together – just not merging. “No customers are affected – this has nothing to do with our customers,” he added.
Ripple first revealed its acquisition plans in early September after a security incident with one of Fortress’s partners gave hackers access to a handful of the crypto custodians’ customer accounts. Fortress immediately covered losses for most affected customers at the time and was able to fully cover one particularly large client thanks to Ripple’s help.
Fortress CEO Clears the Air on Security Breach and Stolen Funds
Since acquiring financial technology firm Fortress four days ago, Ripple had to fill a hole in some of the crypto custodian’s customer accounts after a security breach two weeks ago. Upon briefly disclosing the breach last Thursday, Fortress claimed that impacted accounts were “fully restored,” and that there had been “no loss of funds.” The confusing explanations from both companies stoked community concern around Fortress’s transparency, its client safety, its partners’ involvement—and who, ex...
Though the incident accelerated Ripple’s plans, Fortress had been in talks for a potential acquisition for months with multiple partners including Ripple and BitGo.
A Ripple spokesperson told Decrypt at the time that Fortress was seeking partners to help grow its payments business, FortressPay. “This opportunity makes sense for Ripple in the long term,” they said.
After the deal was canceled, the same spokesperson for Ripple declined to provide further comment.
