- Ripple withdraws its decision to acquire Nevada-based chartered trust company, Fortress Trust, although it had signed a letter of intent a few weeks ago.
- The abrupt change followed a nearly $15 million cryptocurrency theft from Fortress Trust, although Ripple mentions the acquisition discussions predated the theft incident.
Amid a rollercoaster of events, Ripple, a pivotal player in the blockchain arena, has opted against proceeding with the outright acquisition of Fortress Trust, a Nevada-anchored chartered trust entity. This reversal comes despite a previously signed letter of intent, showcasing Ripple’s cautious re-evaluation in its expansion stratagem.
Unraveling the Change of Heart
Ripple’s CEO, Brad Garlinghouse, unveiled the decision on the social media platform X (formerly known as Twitter), accentuating that while the outright acquisition plan has been shelved, Ripple’s investment stance in Fortress remains unfazed. This announcement brought a veil of transparency on the highly anticipated acquisition move that was projected to be a lesser financial venture compared to Ripple’s previous $250 million procurement of custody firm Metaco.
A layer of complexity was added to the saga when, a day before Ripple’s disclosure, Fortress Trust broadcasted an unsettling occurrence—the pilferage of close to $15 million in cryptocurrency from their vaults. The blame was pinpointed on an undisclosed third-party vendor who succumbed to a phishing onslaught. This vendor, later identified as San Francisco’s Retool, had engineered a portal for a select clientele of Fortress to manage their funds.
The theft incident, although stated by Ripple to have not been the catalyst for their revised acquisition stance, undeniably casts a shadow of risk and meticulous reconsideration on such business collaborations. Especially given the intricate financial and regulatory scaffoldings that Fortress Trust provides to blockchain ventures, the stakes are undoubtedly high.
Scott Purcell, a stalwart in the blockchain domain, helmed the creation of Fortress Trust, continuing his legacy post his tenure as the CEO of crypto custodian Prime Trust until 2020. The chronicles of Prime Trust too had its share of turbulence as a proposed acquisition by BitGo was called off, leading to a receivership scenario.
In spite of the altered trajectory, Ripple’s Garlinghouse holds an optimistic view towards the proficient team at Fortress Trust. Echoing the sentiments of continued support, he envisages potential collaborative endeavors in the unfolding chapters of the blockchain narrative, reflecting a balanced blend of caution and forward-looking optimism in the ever-evolving crypto landscape.
