Ripple Labs Acquiring Crypto Custodian Fortress Trust

Ripple Labs Acquiring Crypto Custodian Fortress Trust

On Friday, Ripple Labs announced that it was acquiring Fortress Trust, which is based in Nevada, and is a web3-focused technology, regulatory, and financial infrastructure provider.

The chief executive of Ripple, Brad Garlinghouse, said in a press release that the company had developed an impressive business catering to both native crypto clients and newcomers in the sector, with recurring revenue.

The acquisition

The CEO further added that they were looking forward to working with the company’s team and using its technology to drive their own business forward in the areas that are vital to crypto infrastructure.

This acquisition comes after Ripple first became a minority shareholder of Fortress in August last year, after investing in the seed funding round of the company.

It also comes after Ripple Labs acquired another crypto custodian named Metaco, based in Switzerland, for a valuation of $250 million.

The Nevada Trust License that Fortress possesses would now be added to the portfolio of regulatory licenses that Ripple now has.

Monica Long, the President of Ripple, said that these licenses can enable the business to deliver strong customer experiences.

She went on to say that their acquisition of Fortress Trust gives Ripple the option of providing a better customer experience to their clients in their existing products and also exploring new products.

The company

Scott Purcell had founded Fortress Trust two years earlier. Until 2020, he had also been spearheading Prime Trust, which had also been based in Nevada.

In June, Prime Trust entered into receivership after the company had been declared insolvent by the regulatory authorities in Nevada. Ultimately, in August, the company had to file for bankruptcy.

According to regulatory filings, access to some crypto wallets of Prime Trust had been lost in December 2021.

It was further disclosed that the company only had a fraction of the Bitcoin required for satisfying all client withdrawals.

A number of Bitcoin financial services companies that were retail-oriented had been using Prime Trust’s services, which included Swan, Coinbits, and Strike.

Other details

Shortly before the downfall of Prime Trust, Swan had fled to Fortress Trust. Cory Klippsten, its chief executive, said that they had no better option.

According to the CEO, they had given preference to Fortress because the company offered individual trust accounts that were bankruptcy remote and legally segregated.

Previously, the Swan CEO had been very critical of Ripple Labs. The fact that the company now owns Fortress has led to speculation if Swan may decide to transition its clients’ assets once more.

Onlookers put the question in front of Klippsten after the acquisition announcement was made on Friday.

The CEO stated that there would not be any change in the near term. He stated that Fortress Trust would be operating as an autonomous unit in the short term.

But, he did add that they would have some news to share in the mid-term.