Ripple abandons Fortress Trust deal after covering $15M loss related to security breach Ripple abandons Fortress Trust deal after covering $15M loss related to security breach
Ripple is expected to recover the millions of dollars that it paid to Fortress Trust.
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Updated: Sep. 29, 2023 at 1:14 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Ripple has abandoned a deal that could have seen it acquire the financial infrastructure firm Fortress Trust, according to a statement on Sept. 28.
Ripple CEO Brad Garlinghouse said in a tweet:
“A few weeks ago, we signed a letter of intent to acquire Fortress Trust — we’ve since made the decision not to move forward with an outright acquisition, though Ripple will remain an investor in [Fortress].”
Garlinghouse otherwise called the company’s team “incredibly talented” said that Ripple will continue to support the team despite the unplanned outcome.
Cancelled deal follows $15M transfer
Though Garlinghouse did not provide an explanation for Ripple’s decision to abandon the deal, past developments indicate that more serious issues are at play. Fortress Trust revealed on Sept. 7 that four of its customers had been affected by a hack that compromised one of Fortress’ unnamed third-party vendors and its cloud tools.
One day later, on Sept. 8, Ripple announced that it had agreed to acquire Fortress Trust but made no mention of the earlier security breach.
Later reports brought new details to light. Though Fortress originally reported “no loss of funds,” Fortress founder and CEO Scott Purcell told Fortune on Sept. 13 that his firm had in fact lost $12 million to $15 million of cryptocurrency when its third-party vendor was breached. Purcell insisted that the company covered the loss “right away.”
Meanwhile, Ripple told The Block on Sept. 11 that it had covered Fortress’ multi-million dollaar loss — a detail not included in its original acquisition announcement.
Reports from Bloomberg on Sept. 28 suggest that Ripple will likely regain the $15 million that it provided to Fortress. Purcell said that his firm intends to repay Ripple after it collects its funds from the third party targeted by the hack.
Purcell also told Bloomberg that the acquisition broke down due to internal divisions at Ripple, noting that some employees “pushed back” against the plan.
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Ripple is a US-based technology company which develops the Ripple payment protocol and exchange network using XRP, the digital asset native to the XRP Ledger.
Brad Garlinghouse stands at the forefront of financial technology as the CEO of Ripple.