20 days after Ripple’s announcement, it will withdraw from the purchase of Fortress

Within 20 days of announcing its acquisition of Fortress Trust to expand its license funds in the United States, financial technology company Ripple is pulling out of a deal.

Ripple CEO Brad Garlinghouse announced on September 28 on X (formerly Twitter) that “we have made the decision not to pursue direct acquisitions,” although Ripple remains a shareholder in Fortress Trust's mother company Fortress Blockchain Technologies.

Ripple first announced the acquisition on September 8, even the company's insiders are surprised with the news, Cointelegraph has learned. At the time, Ripple stated that it plans to invest with other Fortress Group companies, including its affiliate FortressPay.

A few days later, Fortress Trust acknowledged that the acquisition was prompted by a security incident involving a third-party analytics provider. Fortress CEO Scott Purcell said in an interview with Fortune that the company lost between $12 million and $15 million to the attack. Most of the currencies were Bitcoin (BTC) with a small amount of US Dollar Coin (USDC) and Tether (USDT). In the year In 2022, Ripple, an investor in Fortress since its seed, had to step in to fill customers.

A few weeks ago we signed a letter of intent to acquire Fortress Trust – we have since decided not to proceed with direct acquisitions, although Ripple remains an investor in @Fortress_io.

— Brad Garlinghouse (@bgarlinghouse) September 28, 2023

In comments to Cointelegraph, Purcell said the cancellation of the merger was “not a big deal.” According to him, the change of plan has nothing to do with the security problem. “They are an investor and a great partner in the fortress. Nothing will change there,” he said.

Cointelegraph reached out to Ripple, but the company declined to comment beyond the CEO's post.

As Ripple continues its high-profile legal battle with the United States Securities and Exchange Commission, the deal's failure could benefit other companies affiliated with Fortress.

For example, Swan Bitcoin is partnering with BitGo to create a Bitcoin-only trust company in the US, pending regulatory approval. Fortress Trust maintains records for Swan. When the deal falls apart, Swan will no longer be able to participate in Ripple in the country.

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