Ripple buys crypto infrastructure startup called Fortress Trust for an undisclosed amount

Ripple buys crypto infrastructure startup called Fortress Trust for an undisclosed amount

On Friday, Ripple announced that it will acquire Fortress Trust, a startup specializing in crypto infrastructure. This acquisition will allow Ripple to expand beyond its core business of blockchain-enabled payments and give it a license in Nevada. The terms of the deal have not been disclosed.

Ripple buys crypto infrastructure startup called Fortress Trust for an undisclosed amount

Fortress Trust was founded in 2021 by Scott Purcell, an entrepreneur who previously worked with equity and debt crowdfunding. The company focuses on assisting large enterprises in interacting with digital currencies. Purcell was formerly the CEO of Prime Trust, a crypto custodian that unfortunately had to shut down after BitGo abandoned its deal to acquire the firm.

Ripple is widely recognized for its cross-border payment services, which use a blockchain-based messaging system similar to SWIFT. This system enables quick transactions between a network of financial institutions and banks.

Ripple has partnered with various entities, including Modulr in the UK, Nium in Singapore, and SBI Remit in Japan. Furthermore, Ripple employs XRP, a cryptocurrency it owns a significant portion of, to facilitate cross-border payments between financial institutions and banks.

Following the announcement, there was minimal movement in XRP’s value, with the token rising by approximately 0.4% in the last 24 hours and trading at 50 cents.

Over the past few years, Ripple has faced significant challenges, including a lawsuit from the U.S. Securities and Exchange Commission (SEC) that claimed Ripple’s XRP token was security and that its executives sold over $1 billion worth of the token to investors in an illegal securities offering. This led to Ripple’s partnership with MoneyGram being abandoned in March 2021. However, in July, a judge ruled that the XRP token was not necessarily a security on its face, which was a significant victory for Ripple. 

Recently, Ripple’s business has been gaining momentum, especially outside the U.S., where most of its clients are based. Ripple’s chief legal officer, Stu Alderoty, believes that American banks will return to Ripple to use its ODL product after the ruling. 

In May, Ripple acquired Metaco, a Swiss provider of crypto custody services, for $250 million. Ripple has acquired Fortress, a company that provides solutions for institutional crypto traders, to improve the customer experience within its payments and liquidity solutions. While Ripple declined to comment on the size of the deal, it was confirmed that it was less than the amount paid for Metaco. 

With its acquisition of Fortress, Ripple also obtained a Nevada trust, enabling the company to provide regulated services for fiat and crypto to specific customers in the United States. This acquisition adds to Ripple’s growing list of regulatory permits globally.

Ripple has already secured a New York BitLicense, permitting it to participate in regulated virtual currency activities in New York and 30 money transmitter licenses throughout the United States. Additionally, it has received an in-principle Major Payment Institution License from the Monetary Authority of Singapore, the country’s central bank. 

Ripple has expressed interest in obtaining an e-money license with the Irish central bank. According to a Ripple spokesperson, the technology can be used to support new initiatives on their roadmap and enable Ripple to serve a broader segment of customers and use cases in the long run. Ripple is one of many companies in the “crypto custody” space which focuses on assisting businesses and individual users in storing their tokens in a safe, decentralized address without requiring technical expertise.

Fortress Trust employs application programming interfaces (APIs) to enable businesses to obtain data from other software programs, such as wallets holding cryptocurrencies and non-fungible tokens. According to its website, the startup collaborates with various companies, 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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