Ripple Backs Out of Fortress Trust Acquisiton, Citing Change in Strategy

cryptonews.com:

In a surprising turn of events, Ripple CEO Brad Garlinghouse announced today that the financial technology firm will not proceed with its previously planned acquisition of Fortress Trust, a Nevada-licensed financial services provider. 

The decision comes just 20 days after the initial announcement of the acquisition.

Ripple's sudden change of heart marks a notable shift in its expansion strategy, especially in the United States. 

Initially, Ripple had expressed intentions not only to acquire Fortress Trust but also to invest in its affiliated companies, including FortressPay. The goal was to leverage Fortress Trust's existing technology and talent pool to accelerate Ripple's growth. 

Garlinghouse stated that the Fortress team was "incredibly talented and had built products solving real customer problems."

Shortly after the acquisition announcement, however, Fortress Trust admitted that a security incident had caused substantial financial loss. 

In an interview with Fortune, Scott Purcell, CEO of Fortress Trust, revealed that the company lost between $12 million and $15 million due to an attack involving a third-party analytics vendor. Most of the lost funds were in Bitcoin.

In the wake of this security incident, Ripple, an investor in Fortress Trust since its seed round in 2022, intervened to compensate affected customers. Nevertheless, the company decided to retract its acquisition offer. Garlinghouse clarified that while the Fortress team remained talented, "the outcome is different from what was originally planned."

In comments to Cointelegraph, Purcell downplayed the acquisition's cancellation, saying it was "not a big deal" and that the change in plans was unrelated to the security incident. He also emphasized that Ripple