In a surprising turn of events, Ripple has announced its decision to abandon the planned acquisition of financial technology firm and crypto custodian, Fortress Trust. This revelation comes less than a month after Ripple initially expressed its intent to acquire the company.
Ripple CEO Brad Garlinghouse took to Twitter on Thursday to confirm the change in direction, stating, “We’ve since made the decision not to move forward with an outright acquisition, though Ripple will remain an investor in Fortress.” Garlinghouse, however, assured that the decision does not signal a rift in their relationship with Fortress.
While the decision may deviate from the original plan, Garlinghouse commended the robust team at Fortress and the valuable products they have been developing. He expressed optimism about future collaborations, affirming, “We’ll continue to support them and hope to work together in the future.”
Fortress CEO Scott Purcell, who was previously enthusiastic about the acquisition, acknowledged that a difference in business priorities within Ripple led to the decision. According to Purcell, Ripple’s primary focus on pure B2B and institutional global business conflicted with Fortress’s unique B2B2C approach.
“They are really just focused on pure B2B and institutional global business,” Purcell stated. “We were a way for them to diversify into B2B2C.”
Purcell further clarified that Fortress was informed of Ripple’s change of heart prior to the public announcement. Both companies, he assured, maintain a strong relationship and have future plans together, albeit not in the form of a merger. He emphasized that no customers would be affected by this decision, emphasizing, “this has nothing to do with our customers.”
Ripple’s initial interest in acquiring Fortress stemmed from a security incident involving one of Fortress’s partners, which granted unauthorized access to some of the custodian’s customer accounts. Fortress promptly covered losses for the majority of affected customers, and with the support of Ripple, was able to fully compensate one significantly impacted client.
As both companies now navigate this new phase of their relationship, the crypto and fintech communities will undoubtedly be watching closely for any further developments or potential collaborations between Ripple and Fortress Trust.