Ripple Labs has unveiled new details about its acquisition of blockchain infrastructure company, Fortress Trust. The acquisition talks reportedly “accelerated” after Fortress’s customers lost funds due to a security incident involving a third-party vendor.
A spokesperson for Ripple told news outlet The Block, “Conversations accelerated last week following the security incident via a third-party analytics vendor, but this opportunity makes sense for Ripple in the long term.” The spokesperson further clarified that the fintech company, which was already a minority investor in Fortress, had been in discussions about a potential acquisition even before the incident.
News Details On The Ripple-Fortress Deal
Fortress had previously issued a statement on September 7, via X (formerly known as Twitter), confirming that their customers were affected by a “third-party vendor whose cloud tools were compromised.” However, Fortress assured that there had been no loss of funds.
The statement read: “Last week, 4 Fortress customers were impacted by a third-party vendor whose cloud tools were compromised. Thankfully there is no breach within Fortress Technology or systems, impacted accounts were fully restored, and most importantly, of course, there is no loss of funds.”
However, the latest statements by the spokesman paint a different picture. Ripple stepped in to cover the losses suffered by Fortress’s customers, which possibly paved the way for the acquisition.
“Luckily, Ripple was in a position to act quickly to step in and make customers whole, and there have been no breaches to Fortress technology or systems. Fortress notified customers immediately of the incident when it happened – as they mentioned in their tweets,” the unnamed spokesperson added.
The exact amount of crypto lost during the security incident remains undisclosed. Both companies refrained from commenting on specific wallets or customers affected.
Following the security incident, Fortress took immediate action by terminating the vendor integration and pausing all accounts to ensure system-wide security. Ripple Labs announced the acquisition deal on September 8, emphasizing the “great long-term synergies between our businesses.” The acquisition was financed through a combination of cash and equity, though the valuation remains undisclosed.
This acquisition is set to bolster the company’s collection of regulatory licenses, given that Fortress Trust, a subsidiary of Fortress Blockchain Technologies, holds a Nevada Trust License. Ripple has expressed its intentions to continue investing in Fortress and its FortressPay services, which will now incorporate Ripple’s advanced payments technology.
Brad Garlinghouse, CEO of Ripple, remarked, “As an early investor in Fortress Trust, we’ve had a chance to get to know the team, its vision, and technology. We’re excited to bring on this team and its technology to accelerate our business and continue pressing our advantage in the areas critical to crypto infrastructure.”
Scott Purcell, CEO of Fortress Blockchain Technologies, expressed his enthusiasm about the acquisition, stating, “We’re extremely pleased that Fortress Trust will be acquired by Ripple, one of the largest and most innovative companies in the industry.”
As Bitcoinist reported, Ripple seems to be on a acquisition spree. Earlier this year, the company spent $250 million to acquire Swiss custody startup Metaco and also procured a stake in the European crypto exchange Bitstamp. However, it is important to note that the Fortress deal is still subject to due diligence and regulatory approvals.
At press time, XRP traded at $0.4819.
Featured image from CNBC, chart from TradingView.com