Ripple, the recent acquirer of Fortress Trust, has confirmed that it compensated losses incurred by clients of the crypto custodian, contradicting Fortress's earlier statement suggesting no funds were lost during a recent security incident. The value of the crypto lost due to the incident remains undisclosed.
Last week, Fortress Trust announced via Twitter that a compromise in a third-party vendor's cloud tools had affected four of its customers, emphasizing that no funds were lost. However, a statement from Ripple today paints a different picture, suggesting that the company accelerated the acquisition of Fortress in order to compensate for customer losses resulting from the security issue.
"Ripple was in a position to act quickly to step in and make customers whole, and there have been no breaches to Fortress technology or systems," stated a spokesperson from Ripple.
Fortress Trust was founded two years ago by Scott Purcell, who had previously founded another crypto custodian called Prime Trust. Prime Trust declared bankruptcy just last month, amid challenges like an inability to meet customer withdrawals and a significant $8 million loss in TerraUSD investments.
Meanwhile, Mike Belshe, CEO of BitGo, clarified that BitGo was not involved in the security lapse at Fortress. Belshe confirmed that the breach at Fortress was not rooted in BitGo's infrastructure but was attributed to another third-party integration. The assailant succeeded in extracting assets from Fortress's hot wallet system.
Contrary to speculations, Fortress leveraged Fireblocks for its hot wallet operations, not BitGo. Once Fortress grasped the gravity of the breach, they rectified the third-party anomaly. Belshe confirmed BitGo's robust security, emphasizing that the assets BitGo held for Fortress remained unscathed.
Belshe expressed concern over Fortress's communication about the incident and highlighted the necessity for transparency when such breaches occur. He noted that upon learning of the breach, BitGo's immediate counsel to Fortress was to make a public disclosure. However, Fortress opted for a different approach.
Belshe underscored the undeniable necessity for decentralization in the crypto cosmos. He opined that unpleasant incidents will persist, drawing attention to the reticence in the crypto community to address these openly. He pledged allegiance to transparency and independence from individual integrity.
As of today, Ripple's native token XRP is changing hands at $0.48, up 2% in the last 24 hours.
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