Cryptocurrency giant Ripple made headlines on Friday with the announcement of its acquisition of Fortress Trust, a crypto infrastructure startup based in Nevada. While the financial details of the deal were not disclosed, this strategic move provides Ripple with an entry into the Nevada market and diversifies its offerings beyond its primary focus on blockchain-enabled payments.
Founded in 2021 by Scott Purcell, an entrepreneur experienced in equity and debt crowdfunding, Fortress Trust specializes in facilitating large enterprises’ engagement with digital currencies.
Purcell previously served as the CEO of Prime Trust, a crypto custodian that shuttered operations after a failed acquisition deal with BitGo.
Ripple has gained recognition primarily for its role in cross-border payments, utilizing a blockchain-based messaging system similar to SWIFT to expedite transactions among a network of banks and financial institutions.
Notable Ripple partners include Modulr from Britain, Nium from Singapore, and SBI Remit from Japan.
Additionally, Ripple employs XRP, a cryptocurrency in which it holds a substantial stake, for cross-border payments between financial institutions. espite the acquisition news, XRP experienced only a minor 0.4% price increase in the past 24 hours, trading at 50 cents.
Ripple has faced legal challenges recently, notably from the U.S. Securities and Exchange Commission, which alleged that XRP should be considered a security and accused its executives of conducting an illegal securities offering exceeding $1 billion.
This legal battle led to the termination of Ripple’s partnership with MoneyGram in March 2021. However, in July, a judge ruled that XRP was “not necessarily a security on its face.”
Outside the United States, Ripple has seen increasing momentum in its business. The company’s chief legal officer, Stu Alderoty, expressed optimism that American banks would return to using Ripple’s ODL product following the favorable ruling.
The acquisition of Fortress Trust marks Ripple’s second purchase this year, following its $250 million acquisition of Swiss crypto custody service provider Metaco in May.
While Ripple declined to disclose the deal’s size, it emphasized that it was smaller than the Metaco acquisition.
Ripple anticipates that this acquisition will enhance customer experiences in its payments and liquidity solutions, while also obtaining a Nevada trust that expands its regulatory permits worldwide.
With a New York BitLicense, 30 U.S. money transmitter licenses, and an in-principle Major Payment Institution License from the Monetary Authority of Singapore, Ripple continues to explore regulatory expansion.
In the long term, Ripple plans to leverage this technology to support new initiatives and serve a broader range of customers and use cases. The company operates in the “crypto custody” sector, aiding companies and individuals in securely storing tokens in decentralized addresses without requiring extensive technical expertise.
Fortress Trust’s expertise in using application programming interfaces (APIs) to extract data from various software applications positions it as a versatile player in the crypto space. The startup caters to a wide range of sectors, including crypto exchanges, NFT marketplaces, tokenization platforms, corporate brands, agencies, securities exchanges, real estate, healthcare, neobanks, sports and entertainment celebrities, musicians, influencers, and other innovators.
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