Ripple Cancels Fortress Trust Acquisition: Impact on the Cryptocurrency Landscape
Date: 2023-09-29 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, BUSINESS
Ripple Abandons Fortress Trust Acquisition: The Decision and Its Impact
Fintech startup Ripple has abruptly changed its mind about acquiring the company Fortress Trust, leading to an interesting turn of events in the financial market. This decision comes just 20 days after the official announcement of the acquisition of Fortress Trust, leaving many questions unanswered.
Why did Ripple back out?
A clear answer to this question has not been provided. Ripple's CEO, Brad Garlinghouse, shared that the company no longer intends to acquire Fortress Trust but did not disclose specific reasons. Nevertheless, he expressed respect for the Fortress team, describing them as strong and talented.
Ripple remains an investor
It's important to note that despite canceling the deal, Ripple will continue to be an investor and support the company. This may indicate that there is an additional collaboration strategy between the two financial giants that does not involve a full merger.
Security Incident
The primary reason for the initial announcement of the Fortress Trust purchase stemmed from a serious security incident. Hackers gained access to the accounts of clients of one of Fortress's partners, and Ripple contributed to quickly compensating the clients for their losses. This incident may have been a pivotal point that cast doubt on the acquisition plans.
Ripple's Legal Battle with the SEC
Interestingly, this decision comes amid Ripple's ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). Since the proceedings began in December 2020, the SEC has accused Ripple of illegally issuing and distributing securities in the form of XRP tokens.
In July 2023, a judge concluded that private XRP sales did not violate securities laws, which seemed like a victory for Ripple. However, the SEC announced plans to appeal the court's decision, once again creating uncertainty in the cryptocurrency market.
Ripple's withdrawal from the deal with Fortress Trust raises questions and highlights interesting details in the fintech world. It also serves as a reminder of how legal proceedings can impact the cryptocurrency landscape. The situation remains dynamic, and its development will be interesting to monitor.
