Scott Purcell, the founder and CEO of embattled crypto custody company Fortress, has resigned due to wider staffing issues.
The decision follows a hack in early September that cost Fortress $14 million to $15 million in customer funds. Later, Ripple, the blockchain company behind the popular cryptocurrency XRP, made the client complete.
Fortress also laid off at least six employees, mostly salespeople, wealth Already learned. When reached for comment, Purcell confirmed his departure and said Fortress has hired a new CEO, the former chief operating officer of cryptocurrency investment firm iTrust Capital, according to an announcement posted on LinkedIn on Monday.Purcell told wealth He will continue to serve on the board of directors of Fortress’ parent company.
Purcell’s track record in digital assets is not great. He previously served as CEO of Prime Trust, a different crypto custody service, or firm that holds crypto assets like Bitcoin on behalf of clients. In July, Prime Trust accepted conservatorship by the Nevada Department of Financial Institutions and declared bankruptcy in August. Purcell resigned as CEO of the company in 2021.
According to a conservatorship filing filed by Nevada regulator Prime Trust Discover It cannot access some wallets that store users’ cryptocurrencies December 2021then allegedly used customer funds to satisfy withdrawal requests.
The fortress collapsed
Purcell founded Fortress in October 2021, and the company became a major player in the hosting space. Its growth has been in trouble this summer after hackers stole millions of dollars worth of crypto assets, mostly Bitcoin.Purcell later told wealth The incident affected only six of the company’s 225,000 customers.
Before publicly acknowledging the hack, Ripple had announced plans to acquire Fortress, citing the company’s Nevada trust license as one of the reasons for the acquisition.Crypto Industry Publications neighborhood report As part of the acquisition, Ripple stepped in to make customers whole.
ripple abandoned Acquisition plan at the end of September. Purcell said some employees at Ripple were not interested in diversifying into consumer-focused products. (Fortress’ Cryptocurrency Rail, for example, allows banks to offer retail customers the ability to purchase Bitcoin through IRAs.) A spokesperson for Ripple told us wealth The decision to withdraw from the acquisition “was not due to the hack or the way Scott handled it,” adding that Ripple will remain an investor in Fortress.
Although Ripple withdrew from the deal, it did not require Fortress to return the money immediately (essentially a loan), but instead gave the money to the escrow company so that customers could be compensated. “They’re not stressed about it,” Purcell said, “and neither am I.”
Shortly after news of Ripple’s exit broke, Purcell said Fortress laid off four sales team members, as well as several other employees. He later said the company has since rehired an equal number of employees.
As for Purcell’s next venture, he launched a startup earlier this month that is in stealth mode, according to his LinkedIn message.
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