XRP’s recent dip below $0.48 has triggered speculation within the XRP community that Ripple may have sold a substantial amount of XRP to finance its Fortress acquisition.
While these claims remain speculative, they have nonetheless cast a shadow of uncertainty over the XRP market.
Simon Dixon, an investor and Bitcoin maximalist, recently highlighted reports suggesting that, as part of the acquisition deal, Ripple covered losses suffered by Fortress customers in a recent incident. Dixon noted that he is a Ripple shareholder but does not own any XRP.
Bill Morgan, a pro-XRP attorney, responded to Dixon’s disclosure with a question many in the XRP community are now pondering: Could Ripple’s acquisition of Fortress Trust have been funded by selling XRP, thereby exerting downward pressure on XRP’s price?
I wouldn’t want to think that Ripple sold a lot of XRP to fund this acquisition and bailing out of Fortress customers putting downward price pressure on XRP. But that couldn’t be the cause of the price fall today as the whole crypto market fell. https://t.co/siWkXpXL5M
— bill morgan (@Belisarius2020) September 11, 2023
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However, Morgan also acknowledged that the broader cryptocurrency market experienced a decline during this period, so this might not be the case.
Recall that the Fortress acquisition is Ripple’s second largest purchase over the past four months despite the bear market. The firm also acquired custody firm Metaco in May.
Moon Lambo, an XRP community member and YouTuber, suggested that Ripple had a substantial reserve of funds even before the Fortress acquisition. He speculated that Ripple might not have sold more XRP than usual to finance the buyout.
They previously had $1 billion in the bank. Of course I can’t say with any certainty how they funded the purchase, but I suspect they didn’t sell more XRP than normal to pay for it.
— Moon Lambo (@MoonLamboio) September 11, 2023
Morgan agreed, stating that it’s a valid question to consider who bears the risk of Ripple’s acquisitions and potential failures in business: Ripple shareholders or XRP holders.
Notably, Mason Versluis, another XRP community figure and founder of Gold Squad, suggested boldly that Ripple might actually be dumping XRP. He noted that the firm ought to slow down on these selloffs.
Drama Surrounding Ripple’s Fortress Acquisition
WrathofKahneman (WOK), a prominent and vocal figure within the XRP community, added significant depth to the unfolding narrative surrounding Ripple’s acquisition of Fortress Trust.
🍿This is wild🍿Turns out there is a soap opera surrounding the #Ripple acquisition of Fortress Trust. Bankruptcy, theft, Terra – this is a ride, so buckle up..
— WrathofKahneman 🪝 (@WKahneman) September 11, 2023
He highlighted that Fortress Trust had issued a statement on Sept. 7, revealing that they had been compromised by a third party in an incident that affected some customers.
While this announcement was largely seen as an attempt at damage control, it also included a mention of “big company news” to come up later in the week. Little did the community know that this news would involve Ripple’s acquisition of Fortress Trust.
On Sept. 8, Ripple made the unexpected announcement that they were acquiring Fortress Trust. What made this announcement even more intriguing was the fact that it preceded the completion of the paperwork, hinting at a swift and perhaps urgent transaction.
Then, on Sept. 11, The Block reported that the incident experienced by Fortress Trust on Sept. 7 had compelled them to seek a solution. Ripple stepped in and made a significant commitment, ensuring to compensate affected customers.
WOK underscored the fact that Fortress Trust had strategically been removing photos of its leadership team from its website in recent months.
Prime Trust Steps Into the Scene
The connection between Fortress Trust and Prime Trust, another crypto custodian, contributed to the intrigue. It was discovered that Scott Purcell, the CEO of Fortress Trust, was also the founder of Prime Trust.
The story of Prime Trust was itself a saga. BitGo had initially planned to acquire Prime Trust in June but had abruptly backed out, leading to the intervention of Nevada authorities, who put Prime Trust into receivership.
It was revealed that Scott Purcell had been writing on Fortress Trust’s website as the founder and CEO of the company, endorsing BitGo as the leading company for the provision of APIs.
This was the same BitGo that had walked away from Prime Trust, an entity closely associated with Scott Purcell.
To further complicate matters, Banq Inc., a subsidiary of Prime Trust, filed for bankruptcy at the same time as Prime Trust.
Three of the pictures removed from Fortress Trust’s websites included former execs at Banq, including Purcell. Banq now alleges that Purcell and his associates shifted the company’s focus from payments to NFTs and then back to payments.
Banq claims they then stole NFT-related intellectual property, personnel, clients, and computing resources to start their new venture, Fortress NFT Group. The firm is now looking to recover $9 million from Scott Purcell.
WOK pointed out that Ripple has now strategically stepped in to acquire Fortress Trust, with its executives leaving a “trail of bankruptcy and NFT tech.”