Ripple Calls off Fortress Trust Acquisition Less Than One Month into Deal

Less than a month after Ripple was set to take over Fortress Trust, the deal appears to have collapsed. San Francisco-based Ripple had plans to expand its business beyond cross-border payments with XRP and On-Demand Liquidity (ODL), for which it is well known.

It is unclear how much Ripple would have paid for the takeover, which was announced on September 8. The deal would have continued Ripple’s acquisitions, including Metaco, a crypto custody provider purchased by Ripple in May 2023.

Fortress Trust, an investment manager focused on financial infrastructure, licensing, and compliance, manages assets worth US $44.7 billion ($69.3 billion).

Ripple CEO Brad Garlinghouse commented on the failed deal, describing the team at Fortress as “incredibly talented” and said that they would continue to support the team.

Fortress Hacked, $15 Million Stolen

Before the Ripple deal, which ultimately fell through, Fortress experienced a hacking incident. Fortress Trust CEO Scott Purcell told Forbes at the time that hackers stole around US $15 million ($23 million), mostly in Bitcoin, along with some USDC and USDT. Shortly after, Ripple had, according to Fortress “wired in the $15 million,” which meant customers did not lose any funds. 

Why Did the Deal Fall Apart?

According to Bloomberg, Purcell stated that internal disagreements at Ripple led to the deal falling apart. Fortress Trust expects to repay the US $15 million once it re-claims funds from the third party involved in the hack.

The legal Battle with the SEC

Meanwhile, the legal fight between the US Securities and Exchange Commission (SEC) and Ripple continues, with a trial expected in 2024 and an interlocutory appeal by the SEC looming. Ripple has also just hired Rahul Mukhi, defence lawyer and former federal prosecutor who will represent Ripple and Garlinghouse in the trial. Mukhi has extensive experience in criminal, securities, and other enforcement and regulatory matters, as well as complex litigation.

XRP has recently faced ups and downs, particularly with news from New York’s Department of Financial Services removing XRP and others from its ‘greenlist.’ The list which now only includes Bitcoin, Ethereum, and some stablecoins, means any DFS-licensed firm can custody or list those assets mentioned.

Despite the sobering news, XRP is trending up, currently trading for US $0.51 ($ 0.79). According to CoinMarketCap XRP price rose 2.25% in the past 24-hours.