HomeCryptoCrypto news: Ripple backs out of purchase of Fortress

Crypto news: Ripple backs out of purchase of Fortress

The news came directly from the CEO of the crypto company: Ripple has given up proceeding with the purchase of Fortress.

Brad Garlinghouse explained that a few weeks ago they had signed a letter of intent to acquire Fortress Trust, but later made the decision not to proceed with the final acquisition while remaining investors. 

The crypto deal between Ripple and Fortress

Fortress Financial Technologies is a compliance company with regard to Web3 projects. 

So it has strictly to do with the crypto world’s dealings with current regulation and standards, something that could certainly come in handy for Ripple. 

The company was created specifically to provide financial, regulatory and technological infrastructure to the Web3 industry, and to enhance innovations related to ePayments, eTrust and asset tokenization.

Over time it has already raised $34 million in investment, coming not only from Ripple but from five other investors-Salt, Ayon Capital, Nevcaut Ventures, Mighty Capital, and Eagle River. 

Ripple’s crypto project and the Fortress acquisition

Ripple‘s idea was to buy Fortress Trust, which is a Fortress Group company. 

The goal was to integrate compliance-related services into the suite of services offered by Ripple. 

Ripple has been the primary investor in Fortress Blockchain Technologies since 2021, and by acquiring Fortress Trust it wanted to accelerate its business and assert its competitive advantage in some critical areas for crypto infrastructure, such as compliance. 

Garlinghouse, however, did not specify their reasons for abandoning the purchase. 

What’s more, it also sounds pretty strange, since in the official press release of September 8 they wrote explicitly that they had agreed to acquire Fortress Trust. In fact, the title of the communiqué actually stated that the acquisition was already final. 

Instead, it now turns out that it was not final at all, and that even a few days after the announcement there will be no acquisition. 

The reasons

Since there are no official reasons behind this sudden about-face one can only speculate. 

The process of this initiative was at least anomalous, if not strange, so much so that it instills several doubts. 

It seems that they had actually decided to go ahead with the purchase, so something must have then happened that made them change their minds. 

In such cases unexpected problems sometimes arise once the details of the acquisition are worked out. While it is very likely that the price had already been agreed upon and accepted by both parties, it is not certain, however, that all the details had already been fixed. 

Moreover, during 2023 Ripple had already successfully completed other acquisitions, so such behavior is indeed anomalous. 

Although the details that caused the change of mind are not known, one would imagine that they are somehow related to Fortress Trust’s actual business, which perhaps turned out to be different from Ripple’s expectations. 

It is also not to be ruled out that some information that was not known before the final signing of the deal surfaced and that we installed doubts in Ripple regarding, for example, the sustainability of the business. 

The regulatory framework in the US

It should also be pointed out that the regulatory framework for cryptocurrencies and Web3 in the US is still decidedly uncertain, if not smoky. 

There are no precise and dedicated rules, and even public authorities struggle to interpret existing regulations in light of the innovative characteristics of these new assets. 

In theory Fortress Trust was supposed to help Ripple precisely within that context, but in the absence of certainty it is really difficult to see how it would be convenient to proceed legally so as not to have compliance problems later on. 

At this point it will be interesting to see whether Ripple will opt for collaborations or acquisitions of other compliance entities or whether it will simply support Fortress Financial Technologies as it has done so far.

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".