Ripple has made a noteworthy decision by backing out of its original intention to acquire Fortress Trust completely. This marks a substantial departure from its stance just three weeks ago. However, the company remains steadfast in its commitment to supporting Fortress and retaining its investment in Its parent company.
Brad Garlinghouse, Ripple’s CEO, utilized the X platform to deliver this news. He openly recognized that the result deviated from their initial plan to acquire Fortress Trust.
Although Garlinghouse didn’t reveal the exact reasons behind the cancellation, he underscored Ripple’s commitment to remaining an investor in their Blockchain Technologies, the overarching entity encompassing Fortress.
In a tweet, Garlinghouse conveyed,
“The Fortress team has exceptional talent and has developed solutions that tackle real customer problems. Even though the situation has deviated from our original plans, we’ll maintain our support and look forward to potential future collaborations.”
Ripple and Fortress initiated their association in 2022 when Ripple joined in Fortress’s seed funding, securing a minority stake in the company.
Ripple’s Expansion Strategy and Fortress Trust Acquisition Amidst Security Breach
In a more recent development, on September 8 of this year, Ripple revealed its intention to acquire Fortress Trust. This came shortly after the acquisition of the crypto custody provider Metaco for a sum of $250 million.
The planned acquisition of Fortress Trust aimed to expand Ripple’s collection of regulatory licenses, notably due to the company possessing a Nevada Trust license.
However, on September 7, right before the acquisition plans were unveiled, Fortress disclosed a security breach impacting four clients, which was attributed to a third-party vendor.
As part of the acquisition agreement, Ripple took action to compensate the four affected clients. However, the precise magnitude of the incident and the amount of compensation provided remained undisclosed by both companies.
Read More:
Federal Judge Denies Temporary Release for Sam Bankman-Fried Ahead of Fraud Trial
Ethereum Futures ETF may commence trading in the Coming Week – Bloomberg Analyst