March 27, 2024
Ripple Acquires Fortress Trust Amid Security Incident
Latest Cryptocurrency News

Ripple Acquires Fortress Trust Amid Security Incident

Ripple, in the process of acquiring blockchain infrastructure startup Fortress Trust, stepped up to cover the losses incurred by Fortress customers due to a security incident, as confirmed by Fortress in a statement on September 7. Fortress attributed the incident to a “third-party vendor whose cloud tools were compromised” but clarified that no funds were lost.

A Ripple spokesperson stated that discussions regarding a potential acquisition had already been in progress with Fortress, as Ripple was already a minority investor in the company. They emphasized that Ripple took swift action to make sure customers were fully compensated, and there were no breaches in Fortress technology or systems. The exact amount of crypto lost in the security incident remained undisclosed, with Ripple declining to comment on specific wallets or customers.

Following the incident, Fortress took immediate action by terminating the vendor integration and temporarily suspending all accounts to assess and enhance system-wide security. Ripple officially announced the acquisition on September 8, citing significant long-term synergies between the two companies and financing the deal with a combination of cash and equity.

This acquisition, pending regulatory and due diligence approvals, would expand Ripple’s collection of regulatory licenses, as Fortress Trust, a subsidiary of Fortress Blockchain Technologies, holds a Nevada Trust License. Ripple expressed its intent to continue investing in Fortress and its FortressPay services, incorporating Ripple’s payments technology.

Ripple has been actively expanding its portfolio throughout the year, including the acquisition of Swiss custody startup Metaco and a stake in the crypto exchange Bitstamp. In July, Ripple achieved a partial victory 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 full definition of a securities offering.

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