CEO Mike Belshe Says BitGo Advised Fortress To Reveal Loss Of Funds

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CEO Mike Belshe Says BitGo Advised Fortress To Reveal Loss Of Funds

On September 12, digital asset security company BitGo’s CEO Mike Belshe expressed his disappointment in the “Fortress Trust episode,” in a tweet. In early September, Nevada State Chartered Trust Company, Fortress Trust reported that four of its customers had been affected after cloud tools used by a third-party vendor became compromised. While the firm announced that there was “no loss of funds,” Ripple has reported otherwise.

I can’t express enough how upsetting this Fortress Trust episode is to me. I really don’t want to talk about it at all, because it actually has nothing to do with BitGo. But because Fortress was not forthcoming about what actually did happen, we are now indirectly affected -…

— Mike Belshe (@mikebelshe) September 11, 2023

On September 8, Ripple acquired Fortress Trust, which is a part of Fortress Blockchain Technologies. Just four days later, security and privacy monitor Jameson Lopp tweeted that Ripple “says there was a loss of funds”, in an apparent contradiction of Fortress Trust’s announcement. Reportedly, Ripple covered client losses as a part of the acquisition. A spokesperson from Ripple highlighted,

Luckily, 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. Fortress notified customers immediately of the incident when it happened — as they mentioned in their tweets.

In his tweet, Belshe clarified that despite Fortress Trust using BitGo to custody its digital assets including Bitcoin, “BitGo was not affected”, and that the integration with the third party did not pose any risk to the BitGo assets held at Fortress Trust. According to the CEO, an attacker was able to drain funds from Fortress Trust’s hot wallet system following a security breach through “some third party integration”, which he said was not BitGo.

Belshe expressed his disappointment in Fortress Trust’s decision not to disclose the loss of funds from its hot wallets. He shared that BitGo, upon learning of the breach, had strongly recommended Fortress immediately disclose this information. The CEO applauded Ripple for reimbursing all affected clients as part of its acquisition of Fortress Trust. He is optimistic that Ripple will deploy the resources required to address the security vulnerabilities that contributed to the breach.

Lastly, Belshe added that attacks are inevitable, yet “BitGo as a decentralized wallet platform,” will continue to preach decentralization for a transparent and independent financial system.


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