BitGo, a digital asset custodian, has announced the termination of its planned acquisition of Prime Trust, a crypto custodian. The decision comes just two weeks after BitGo shared its non-binding letter of intent to acquire Prime Trust, citing significant efforts to find a way forward with the company. The cancellation raises questions about the future of both firms and the factors that led to this unexpected development.
Prime Trust, a Nevada-based custodian, has recently faced challenges. Reports emerged earlier this year about significant layoffs within the company, and it has also been linked to controversies, such as a $500,000 contribution to the Oregon Democratic Party, which was traced back to a former FTX executive. Furthermore, Prime Trust’s subsidiary, Banq, recently filed for Chapter 11 bankruptcy protection, revealing assets worth $17.72 million and liabilities of $5.4 million.
Speculation has surfaced regarding the possible reasons for BitGo’s decision to cancel the acquisition. Unconfirmed rumors on Twitter suggest that Prime Trust may have received a cease and desist order from Nevada State regulators, although these claims have not been verified. The timing of Banq’s bankruptcy filing shortly after BitGo’s expression of intent to acquire Prime Trust raises questions about its potential impact on the deal.
Uncertainty surrounds Prime Trust as deposits and withdrawals suspended
As news of the termination of the BitGo-Prime Trust acquisition spreads, uncertainty looms over Prime Trust’s operations. Reports indicate that Prime Trust customers received an email on June 21 informing them that deposits and withdrawals were being suspended. The email urged customers to cease sending custody assets to Prime Trust, especially digital assets.
Prime Trust’s Twitter account has been notably silent on the matter, with no updates since May 5, 2023, adding to the air of uncertainty. Meanwhile, BitGo announced on Twitter, emphasizing that the decision was not taken lightly and reaffirming its commitment to delivering trust in digital assets.
The cancellation of the acquisition deal raises questions about the future prospects of both BitGo and Prime Trust. It remains to be seen how these developments will impact the broader crypto custodian landscape and the clients who rely on Prime Trust’s services. As the industry awaits further updates, stakeholders will closely monitor the situation and its potential ramifications.
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