San Francisco-based blockchain firm Ripple has decided to abandon its previously announced acquisition of Fortress Trust, a financial institution known for offering Web3-based financial and tech solutions. CEO Brad Garlinghouse revealed the decision via the X social media platform, assuring that Ripple would continue to be an investor in Fortress.
A strategic move
This U-turn follows the announcement made earlier this month that Ripple intended to acquire Fortress Trust for an undisclosed sum of money. This came shortly after Ripple secured a deal to buy Swiss custody startup Metaco for a quarter billion dollars.
The acquisition was seen as a strategic move to expand its portfolio of regulatory licenses and to accelerate its presence in crucial areas of crypto infrastructure. The high-profile deal was still subject to due diligence when it was first announced.
Security breach complications
The deal, however, was overshadowed by a substantial security breach at Fortress, where a theft of $15 million occurred due to a phishing attack on one of its third-party vendors, Retool. The vendor fell prey to a sophisticated SMS-based phishing attack, compromising the accounts of 27 of its cloud customers, most of them operating in the crypto sector. The vulnerability allowed the attackers to gain elevated access to Retool's internal admin systems.
This incident made Ripple’s acquisition noteworthy since it included a bailout clause for the hacked customers of Fortress. The company ensured that the customers would not suffer due to the security lapses at Fortress, and agreed to compensate the affected customers as part of the deal.
Gamza Khanzadaev
Tomiwabold Olajide
Yuri Molchan
