The decision to cancel the acquisition came in the wake of a security incident involving a third-party analytics vendor, which resulted in a loss of $12 million to $15 million, primarily in Bitcoin (BTC), along with smaller amounts of USD Coin (USDC) and Tether (USDT). Ripple stepped in to compensate customers for these losses.
Despite the change in plans, Garlinghouse expressed his continued support for Fortress Trust. He praised the team for their talent and their products that solve real customer problems. He also expressed hope for future collaborations between the two companies.
Fortress Trust was established in 2021 by Scott Purcell, an entrepreneur with a background in equity and debt crowdfunding. The company aims to help large enterprises navigate the complexities of digital currencies. The potential acquisition by Ripple was noteworthy as it would have granted Ripple a license in Nevada, opening up new regulatory possibilities for the company and allowing it to extend its range of regulated services to specific customers within the United States.
While the financial specifics of Ripple’s failed acquisition of Fortress Trust remain undisclosed, insiders hinted that the deal’s price tag was below the $250 million that Ripple paid for Metaco, another custody services company, back in May.
This development comes at a time when Ripple’s XRP token is gaining interest from private and public entities following a landmark court ruling. The court determined that XRP is not necessarily a security but can be considered one when sold to institutional investors, meeting the conditions set by the Howey Test.
Ripple views this court decision as a victory and a positive development for its growth in the US market. With its legal position clarified, the company is now looking to expand its operations by seeking the necessary regulatory licenses for conducting crypto-related activities.
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Source: Cryptocurrency - investing.com
