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Enterprise blockchain solutions provider Ripple has confirmed that it is in the process of an acquisition of Fortress Trust, a financial institution specializing in Web3 financial, regulatory, and technological infrastructure for blockchain enterprises.
Ripple's acquisition of Fortress Trust follows its recent purchase of crypto custody provider Metaco for $250 million. The latter transaction is noted as one of the most significant deals in the cryptocurrency sector for 2023. Through its technical capabilities and regulatory licensing, Fortress Trust offers infrastructure that aims to cater to the burgeoning enterprise crypto market.
Brad Garlinghouse, CEO of Ripple, commented on the acquisition,
“As an early investor in Fortress Trust, we’ve had a chance to get to know the team, its vision and technology. Since their launch in 2021, they’ve built an impressive business with recurring revenue and a strong roster of both crypto-native and new-to-crypto customers [...]"
Regulatory Implications & Contexts
One of the key elements of this acquisition is the regulatory licenses that Fortress Trust brings to Ripple's portfolio. Specifically, Fortress Trust holds a Nevada Trust license. In addition to this, Ripple and its subsidiaries already possess a NY BitLicense, over 30 Money Transmitter Licenses across the U.S., and an in-principle Major Payment Institution License from the Monetary Authority of Singapore. In the past year or so, Ripple has been battling regulatory oversight over its products and services, in an effort to maintain its compliance and business stature.
On this context, Monica Long, President at Ripple, shared the following remark:
“Licenses are a powerful enabler to build and deliver best-in-class customer experiences for enterprises using Ripple’s crypto infrastructure across our payments and liquidity solutions,”
Long's statement underlines the functional role licenses play in the operations of companies like Ripple and how acquisitions can strategically influence this aspect, enabling its users to explore and expand their use cases across a complementary suite of produclts.
Established as a solution to address challenges in cross-border payments using blockchain and cryptocurrency, Ripple has since diversified its product suite. The company's services now also colver areas like liquidity management, tokenization, and central bank digital currencies (CBDCs). With customers spread across 55 countries, Ripple has established a broad operational base.
Scott Purcell, CEO of Fortress Blockchain Technologies, said that the acquisition was a "testament to the team and business that we’ve built in a short period of time," adding that the partnership will be deepened through the firm's Web3 payments solution.
Notably, Ripple had previously invested in Fortress Blockchain Technologies in 2022. Following the acquisition's closure, Ripple plans to invest in the parent company, Fortress Blockchain Technologies. It should be noted that the completion of this deal hinges on due diligence and regulatory approvals.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.