Ripple Acquires Fortress Trust to Cover Customer Losses
Ripple, the crypto payments business, has stepped in to cover losses suffered by customers of blockchain infrastructure startup Fortress Trust. Fortress had revealed that its customers were affected by a security incident involving a compromised third-party vendor. However, Ripple came to the rescue and made Fortress’s customers whole as part of the acquisition process. Ripple had previously discussed a potential acquisition with Fortress and saw this incident as an opportunity to move forward with the deal. The spokesperson for Ripple clarified that there were no breaches to Fortress’s technology or systems. The exact amount of crypto lost in the incident remains unknown.
A Deal is Finalized
Following the security incident, Fortress terminated the vendor integration and paused all accounts to assess system-wide security. Ripple announced the acquisition of Fortress Trust on September 8, citing long-term synergies between the businesses. The deal, financed with cash and equity, is subject to regulatory and due diligence approvals. Through this acquisition, Ripple will expand its collection of regulatory licenses, benefiting from Fortress Trust’s Nevada Trust License. Furthermore, Ripple plans to invest in Fortress and its FortressPay services, utilizing Ripple’s payments technology.
Ripple’s Acquisition Spree
Ripple has been active in acquiring other companies this year. It spent $250 million to acquire Swiss custody startup Metaco and also acquired a stake in the crypto exchange Bitstamp. In July, Ripple achieved a partial win in its legal battle with the United States Securities and Exchange Commission when a federal judge ruled that some of its XRP sales did not meet the definition of a securities offering.
Hot Take: Ripple Expands its Reach with Fortress Trust Acquisition
Ripple’s acquisition of Fortress Trust not only allows it to cover customer losses but also provides an opportunity for long-term growth and expansion. By acquiring Fortress Trust and its regulatory licenses, Ripple can enhance its position in the crypto market. This acquisition follows Ripple’s strategy of investing in and acquiring innovative companies to strengthen its offerings. With its recent acquisitions and legal victories, Ripple continues to cement its position as a major player in the crypto industry.
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