April 19, 2024
Ripple's U-Turn: From Acquisition Plans to Investment Strategy
Latest Cryptocurrency News

Ripple’s U-Turn: From Acquisition Plans to Investment Strategy

Less than a month after declaring it would, Ripple has now revealed it has no longer any intentions to purchase the financial technology company and cryptocurrency custodian Fortress Trust.

“We’ve since made the decision not to move forward with an outright acquisition, though Ripple will remain an investor in Fortress,” stated Ripple CEO Brad Garlinghouse over Twitter on Thursday.

Garlinghouse said that Fortress has a capable staff working on useful things. “While this outcome is different from what was originally planned, we’ll continue to support them and hope to work together in the future,” he added.

Scott Purcell, CEO of Fortress, expressed optimism about the transaction in early July, claiming that Ripple was “by far the best partner for us and our customers.” However, Ripple delayed buying Purcell’s company due to internal conflict over its strategic aims.

“They are just focused on pure B2B and institutional global business, Purcell commented on Thursday. “We were a way for them to diversify into B2B2C.”

“Many on their team were super excited about our tech and customer base, but others pushed back to stay on the current course,” he explained.

Purcell made it clear that Fortress knew about Ripple’s change of heart before the announcement and that both businesses continue to have a close connection and share future ambitions, but they are not combining. “No customers are affected; this has nothing to do with our customers,” he added.

After a security problem involving one of Fortress’s partners provided hackers access to a few of the crypto custodians’ client accounts, Ripple initially disclosed its takeover aspirations in early September. Most impacted clients had their losses reimbursed right away by Fortress at the time, and with Ripple’s assistance, Fortress was able to fully cover one very big client.

Even if the tragedy sped up Ripple’s preparations, Fortress has been in discussions for months with several parties, including Ripple and BitGo, about a possible acquisition.

At the time, a representative for Ripple reported that Fortress was looking for partners to expand its FortressPay payments company. They said that in the long run, Ripple would benefit from this opportunity.

The same Ripple spokesman declined to make any more comments following the cancellation of the contract.

Image: Unsplash

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