Financial technology firm Ripple has announced that it will not proceed with its acquisition of Fortress Trust, just 20 days after the initial announcement. Ripple’s CEO Brad Garlinghouse confirmed the decision, stating that the company will remain a shareholder in Fortress Trust’s parent company, Fortress Blockchain Technologies. The surprise acquisition had been intended to expand Ripple’s pool of licenses in the United States, with plans to invest in other companies within the Fortress group. The cancellation of the deal is unrelated to a security incident involving a third-party analytics vendor, in which Fortress Trust lost millions of dollars. Ripple’s decision not to move forward with the acquisition could benefit other companies linked to Fortress.
Fortress Trust CEO Scott Purcell has downplayed the significance of the cancellation, stating that it is “not a big deal.” He clarified that the change of plans is not related to the security incident and that Ripple will continue to be an investor in Fortress. Ripple declined to comment further on the matter. As Ripple engages in a legal battle with the US Securities and Exchange Commission, the failure of the acquisition could prove beneficial for other companies associated with Fortress. For instance, Swan Bitcoin, which is working on a joint venture with BitGo to create a Bitcoin-only trust company in the US, will no longer be involved in Ripple’s business in the country due to the collapsed deal.
This unexpected decision by Ripple to scrap the acquisition of Fortress Trust comes shortly after the initial announcement, surprising both company insiders and industry watchers. While Ripple remains a shareholder in Fortress Blockchain Technologies, the cancellation could have implications for both companies. However, Fortress Trust’s CEO suggests that the cancellation is insignificant and does not affect Ripple’s investment in the company. As Ripple faces its legal battle, other companies linked to Fortress, such as Swan Bitcoin, may experience repercussions as their plans with Ripple in the US are no longer viable. The reasons behind the cancellation are unrelated to a security incident that affected Fortress Trust, in which the company lost millions of dollars. Overall, this abrupt turn of events highlights the volatility and unpredictable nature of the fintech industry.