Fortress Trust Discloses $15 Million Cryptocurrency Theft Involving Third-Party Vendor and Phishing Attack

Fortress Trust recently disclosed a significant cryptocurrency theft amounting to nearly $15 million. This incident has brought attention to a complex situation involving a third-party vendor and a phishing attack.

The vendor responsible has now been identified as ReTool, a reputable San Francisco-based company that serves Fortune 500 clients. ReTool developed the portal used by several Fortress clients to manage their cryptocurrency funds.

The theft, attributed to a phishing attack, has prompted Fortress to expedite discussions with blockchain tech firm Ripple for the purpose of acquisition. ReTool has confirmed that it fell victim to a phishing attack affecting 27 of its customers, but did not directly mention Fortress in its statement.

This attack targeted a specific group of crypto-oriented customers, but those who followed ReTool’s recommended software configuration remained unaffected.

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ÔÇ£Although an attacker had access to Retool cloud, there was nothing they could do to affect on-premise customers,ÔÇØ emphasized ReTool. ÔÇ£ItÔÇÖs worth noting that the vast majority of our crypto and larger customers in particular use Retool on-premise.ÔÇØ

While $15 million is undoubtedly a significant loss, it only represents a small fraction of Fortress’s overall assets under management, which total billions of dollars. As part of their ongoing acquisition deal, Ripple has already made a $15 million down payment to help Fortress reimburse affected customers.

The Timeline

According to a spokesperson from Ripple, Fortress initially covered the losses of most affected customers. Ripple then stepped in to ensure that all customers, especially one large customer, were fully compensated within a week.

Fortress disclosed the security breach on September 7 without revealing the name of the compromised third-party vendor. The following day, Ripple, which was already a minority investor in Fortress, announced its intention to acquire the custodian. The incident expedited the takeover talks as Ripple acted swiftly to safeguard customer interests.

BitGo and Fireblocks, the wallet providers utilized by Fortress, clarified that their systems were not breached. BitGo’s CEO, Mike Belshe, emphasized that their company was not involved in the breach and criticized Fortress’s handling of the situation due to their delayed disclosure of all details.

Fortress CEO Scott Purcell claimed that Belshe was informed of all events regarding the security breach from the moment they occurred.

Swan Bitcoin, a brokerage firm utilizing Fortress’ BitGo wallets for client funds, confirmed that the coins stored in those wallets remained secure throughout the incident.

The Nevada Financial Institutions Division, responsible for overseeing Fortress, was informed of the incident on September 1, according to an agency spokesperson.