Home Finance News Ripple withdraws Fortress acquisition after 20-day announcement. (9 words)

Ripple withdraws Fortress acquisition after 20-day announcement. (9 words)

Ripple withdraws Fortress acquisition after 20-day announcement. (9 words)

Financial technology firm Ripple has announced that it will no longer proceed with its acquisition of Fortress Trust, just 20 days after the deal was initially announced. Ripple’s CEO, Brad Garlinghouse, confirmed the decision on social media, stating that while Ripple will remain a shareholder in Fortress Trust’s parent company, it will not proceed with the acquisition. The surprise announcement of the acquisition had been made on September 8th, with Ripple intending to invest in other companies within the Fortress group. However, a security incident involving a third-party analytics vendor accelerated the acquisition and resulted in Ripple stepping in to compensate Fortress Trust for the loss of $12-15 million in Bitcoin and other cryptocurrencies. Both Ripple and Fortress Trust have stated that the cancellation of the deal is not related to the security incident.

Fortress Trust’s CEO, Scott Purcell, has commented that the cancellation of the merger is not a significant issue and does not affect Ripple’s status as an investor and partner in the company. Ripple declined to comment further on the matter beyond Garlinghouse’s statement. With Ripple currently engaged in a legal battle with the US Securities and Exchange Commission, the failure of the merger could benefit other companies associated with Fortress. For instance, Swan Bitcoin’s planned joint venture with BitGo to create a Bitcoin-only trust company in the US, which involves Fortress Trust providing custody of records for Swan, will no longer involve Ripple. The cancellation of the acquisition will also allow Ripple to focus on its ongoing legal issues.

In summary, Ripple has reversed its decision to acquire Fortress Trust, just weeks after the deal was announced. The surprise acquisition plan was accelerated due to a security incident, resulting in Ripple compensating Fortress Trust for a multimillion-dollar loss in cryptocurrencies. The cancellation of the deal is separate from the security incident and has been described as not a significant issue by Fortress Trust’s CEO. This development could have implications for other companies linked to Fortress, such as Swan Bitcoin, as they may no longer be involved in Ripple’s US business.

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