Fortress lost $14M to hackers, then Ripple walked — CEO Scott Purcell stepped down

Fortress, founded by Scott Purcell in October 2021, had become a major player in crypto custody — holding assets such as Bitcoin on behalf of clients — with 225,000 customers. In early September 2023 hackers stole $14 million to $15 million of customer funds, mostly in Bitcoin; Purcell said the incident affected only six customers out of the 225,000.

Before the hack was publicly acknowledged, Ripple had announced a planned acquisition of Fortress, citing the firm's Nevada trust license, and stepped in to make customers whole — essentially a loan. In late September Ripple abandoned the acquisition. Purcell said a subset of Ripple staff were not interested in diversifying into consumer-focused products; a Ripple spokesperson said the decision was "not due to the hack or how Scott handled it" and that Ripple remains an investor and is not requiring immediate repayment.

The fallout reached the founder. Fortress laid off at least six employees, mostly in sales, and on 24 October 2023 Fortune reported Purcell had stepped down as CEO, replaced by Rich Hauschild, former COO of iTrustCapital, while Purcell stayed on the board of Fortress's parent. It was his second custodian blowup: Prime Trust, where he was CEO until 2021, entered Nevada receivership in July 2023 and bankruptcy in August after discovering in December 2021 it could not access some customer wallets — and allegedly using customer funds to satisfy withdrawals.

$14M–$15M of customer funds lost; the Ripple acquisition collapsed in late September; at least six staff laid off and the founder-CEO was out by October.

A custody business sells safety, and the breach hit customer funds directly — the core promise of the product.

Ripple's rescue money made clients whole, but the buyer still walked: it separated the hack response from the deal, keeping the loan and dropping the company.

The collapse repriced the team as fast as the firm — layoffs hit sales first, and the founder-CEO was replaced within six weeks of the breach.

Purcell's record compounded it: Prime Trust, his previous custody company, was in Nevada receivership by July 2023 over inaccessible wallets and alleged misuse of customer funds.

In crypto custody, one breach can price you out of your own rescue: the buyer's money can make customers whole, but the risk stays on your side of the table.

Rich Hauschild took over as CEO; Purcell remained a board member of Fortress's parent company and said Ripple was in no rush to be repaid the customer-rescue loan — "they're not stressing out about it, and neither am I." Fortress said it had since hired back an equal number of the people it laid off. By late October 2023 Purcell had already founded a new startup, in stealth mode, according to his LinkedIn.