On Friday, Ripple declared it will be acquiring Fortress Trust, a startup that specializes in cryptocurrency infrastructure, for an undisclosed amount. This transaction will grant Ripple a license to operate in Nevada and let them extend beyond their standard blockchain-enabled payments. Earlier in the year, Ripple arranged to purchase Metaco, a Swiss firm that offers crypto custody services, for $250 million.
On Friday, Ripple, a company specialized in cryptocurrency, announced the acquisition of Fortress Trust, a startup focusing on crypto infrastructure. They did not reveal details about the transaction. Founded in 2021 by Scott Purcell, an experienced equity and debt crowdfunding specialist, Fortress Trust seeks to help large-scale enterprises interact with digital currencies; previously, Purcell was CEO at Prime Trust, a crypto custodian that was intended to be bought by BitGo, and ultimately closed down.
Ripple is mainly known for its role in cross-border payments. It uses a blockchain-based messaging system that is similar to SWIFT, approving rapid transactions between banks and other financial institutions. Their partners include Modulr in Britain, Nium in Singapore and SBI Remit in Japan. Additionally, Ripple utilizes XRP, a cryptocurrency of which they own a considerable portion and is associated with them, in cross-border payments between banks and other financial institutions.
In the past 24 hours, XRP has only seen a slight increase in its value, trading for 50 cents at the time of writing. As of late, Ripple has faced difficulties. In March 2021, the U.S. Securities and Exchange Commission filed a lawsuit against the firm, claiming that XRP is a security and that their executives sold an illegal amount of XRP to investors. Prior to this, Ripple had an agreement with MoneyGram, using XRP as a bridge currency in transfers in an effort to bypass pre-funded accounts. Nonetheless, the lawsuit led both companies to part ways.
Despite recent troubles, Ripple was able to obtain a legal victory in July when a judge ruled that XRP was not necessarily classified as a security. Furthermore, the company's business has been seeing improvements, especially outside the U.S. When interviewed by CNBC, Stu Alderoty, Ripple's chief legal officer, stated that American banks may return to use Ripple's ODL product.
The Fortress Trust buyout is Ripple's second acquisition this year, following the purchase of Metaco for $250 million back in May. Reportedly, the sum paid for Fortress Trust is lower than the one paid to acquire Metaco. A Nevada trust will be under the ownership of Ripple with this acquisition, adding to the list of regulatory permits that the company currently holds. The Nevada trust will enable them to provide regulated services for both fiat and crypto to some customers in the U.S.
Ripple also holds a New York BitLicense, 30 money transmitter licenses in the U.S., and an in-principle Major Payment Institution License from Singapore's central bank. The spokesperson for Ripple believes that the company will be able to apply the technology gained from the acquisition to support new initiatives and extend their services to a larger range of customers and cases.
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