Ripple announced on Friday that it intends to acquire Nevada-based Fortress Trust—a Web3-focused financial, regulatory, and technology infrastructure provider.
“They’ve built an impressive business with recurring revenue and a strong roster of both crypto-native and new-to-crypto customers,” says Brad Garlinghouse, CEO of Ripple, in a press release. “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.”
The acquisition follows Ripple’s entry into Fortress as a minority shareholder in August 2022, when it invested in the company’s seed round. It also comes after the company’s $250 million acquisition of Swiss tokenization firm Metaco, another crypto custodian.
Today, we are announcing intent to acquire Fortress Trust, part of the @Fortress_io suite of companies. Fortress Trust’s financial and regulatory infrastructure complements and expands Ripple’s comprehensive portfolio of blockchain solutions for finance. https://t.co/LIl3cPEur2
— Ripple (@Ripple) September 8, 2023
Ripple’s portfolio of regulatory licenses now includes Fortress’ Nevada Trust license. According to Ripple President Monica Long, licenses are a “powerful enabler” for strong customer experience.
“Acquiring Fortress Trust affords us a lot of optionality to both improve the current customer experience in our existing products and explore new, complementary products,” she added.
Fortress was founded just two years ago by Scott Purcell, who previously spearheaded the Nevada-based Prime Trust until 2020. Prime Trust entered into receivership in June after revealing Nevada regulators determined the firm was insolvent, before ultimately filing for bankruptcy in August.
Regulatory filings revealed that Prime Trust had lost access to some of its crypto wallets in December 2021, and that it only had a fraction of the Bitcoin necessary to satisfy customers’ Bitcoin withdrawals. Many of its clients included retail-oriented Bitcoin financial services companies, such as Strike, Coinbits, and Swan.
The latter company fled to Fortress shortly before Prime Trust’s collapse. Swan CEO Cory Klippsten told Decrypt then that Fortress was the only feasible option left to serve the company as only Fortress offered “legally segregated, bankruptcy remote” individual trust accounts.
Klippsten has previously been highly critical of Ripple. With Ripple now owning Fortress, onlookers wonder if another transition of clients’ assets could be in the works.
“Near-term, no change,” said Klippsten regarding Swan’s actions post-acquisition on Friday. “Fortress Trust will be run as an autonomous unit. Mid-term, we’ll have some news out very soon.”