Ripple and Fortress Trust: The Sudden End of a Potential Merger

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1 Oct 2023

151

On September 8th, Ripple announced their acquisition of Fortress Trust, a web3-focused financial institution.

Fast forward 20 days later to September 28th and Ripple CEO Brad Garlinghouse announced his company will no longer move forward with the acquisition of Fortress Trust.

Despite the change of heart from Ripple, Garlinghouse confirms that Ripple will “continue to support” Fortress Trust, and the two companies maintain a healthy working relationship.

Following a round of seed funding in 2022, Ripple became a minority investor in Fortress Blockchain Technologies.

“The Fortress team is incredibly talented, and has built products solving real customer problems. While this outcome is different from what was originally planned, we’ll continue to support them and hope to work together in the future!”
- Brad Garlinghouse, CEO of Ripple

On September 7th, the day before the acquisition was announced, Fortress was hacked via third-party cloud software.

Originally, Fortress denied that any customer funds were lost. However, they eventually revealed that customer funds were stolen, but Fortress “instantly used [its] balance sheet to cover most of the customers”.

It is also interesting to note that, as part of the ongoing acquisition talks, Ripple “stepped in to make the rest of those customers whole” with a $15 million payment.

In a statement to Decrypt, Fortress CEO Scott Purcell claims both companies were on different wavelengths, as Ripple was “focused on pure B2B and institutional global business”.

Purcell finished his line of thinking by stating that acquiring Fortress was an option for Ripple “to diversify into B2B2C”, but ultimately, they are going in a different direction.

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What do you think happened to cause this change of heart by Ripple?

What are your thoughts on this news? Join the conversation below!

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