Financial technology firm Ripple has decided to withdraw from its acquisition deal with Fortress Trust, just 20 days after the announcement. Ripple’s CEO Brad Garlinghouse stated that they have chosen not to proceed with the acquisition, but will remain a shareholder in Fortress Trust’s parent company. The initial announcement of the acquisition came as a surprise, with Ripple intending to invest in other companies within Fortress’ group. However, the deal was accelerated following a security incident, in which approximately $12 million to $15 million were lost. Ripple had to step in to compensate the affected customers. Fortress CEO Scott Purcell emphasized that the cancellation of the deal is unrelated to the security incident, and Ripple remains an investor and partner.
In response to the cancellation, Ripple declined to provide further comments beyond Garlinghouse’s announcement. As Ripple faces a legal battle with the US Securities and Exchange Commission, the failed acquisition can potentially benefit other companies associated with Fortress. For instance, Swan Bitcoin, which is working on a joint venture with BitGo to establish a Bitcoin-only trust company in the US, could see positive outcomes, as Fortress Trust provides custody of records for Swan. With the collapse of the Ripple deal, Swan will no longer be involved in Ripple’s operations in the country.
Overall, the withdrawal from the acquisition deal showcases Ripple’s shifting strategies in response to various factors, including the security incident and ongoing legal challenges. Fortress Trust remains optimistic about their partnership with Ripple, highlighting that they are still an investor and emphasizing that the cancellation will not have significant implications. This situation also opens up potential opportunities for other companies associated with Fortress, such as Swan Bitcoin, which may benefit from the termination of Ripple’s involvement in the US market.