Ripple made Fortress customers hit by security incident whole as part of acquisition

Crypto payments business Ripple covered losses suffered by customers of blockchain infrastructure startup Fortress Trust, as part of a deal to acquire it.

Fortress said in a statement issued on X, formerly known as Twitter, on September 7 that its customers had been affected by a “third-party vendor whose cloud tools were compromised,” but that there had been no loss of funds.

It was Ripple, in fact, that stepped in to make Fortress’s customers whole as part of an acquisition process that picked up pace following the incident.

“Conversations accelerated last week following the security incident via a third-party analytics vendor, but this opportunity makes sense for Ripple in the long term,” said a spokesperson for Ripple, who clarified that the company — already a minority investor in Fortress — had discussed a potential acquisition with Fortress previously.

“Luckily, Ripple was in a position to act quickly to step in and make customers whole, and there have been no breaches to Fortress technology or systems. Fortress notified customers immediately of the incident when it happened — as they mentioned in their tweets,” the spokesperson continued.

The amount of crypto lost as a result of the security incident is unclear. Ripple’s spokesperson said the company could not comment on specific wallets or customers.

A deal comes together

After the incident, in its statement on September 7, Fortress said it had “immediately terminated the vendor integration” and paused all accounts to “assess and ensure system-wide security.”

Ripple announced the deal a day later, on September 8, with the company hailing “great long-term synergies between our businesses.” Ripple financed the acquisition with a mix of cash and equity. No valuation was disclosed.

The deal, which remains subject to regulatory and due diligence approvals, would expand Ripple’s collection of regulatory licenses, as Fortress Trust — a subsidiary of Fortress Blockchain Technologies — holds a Nevada Trust License.

Ripple said on September 8 that it plans to continue to invest in Fortress and its FortressPay services, which will now make use of Ripple’s payments technology.

Ripple’s shopping spree

Ripple has been on a shopping spree this year. The company spent $250 million on the acquisition of Swiss custody startup Metaco in May and also acquired a stake in Bitstamp, the crypto exchange.

In July, it scored a partial win in its ongoing battle with the United States Securities and Exchange Commission, when a federal judge ruled that some of its sales of XRP did not fully meet the definition of a securities offering.

Source