Digital asset custodian BitGo has shelved its planned acquisition of one of its rivals Prime Trust, despite a preliminary agreement reached earlier in the month. The initial takeover agreement transpired amid speculation that Prime Trust was facing bankruptcy.
BitGo Shuns Prime Trust Takeover
“After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust,” the California-based firm said in a Twitter post published today (Thursday). “This decision was not made lightly and BitGo remains committed to our mission to deliver trust in digital assets.”
After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust. This decision was not made lightly and BitGo remains committed to our mission to deliver trust in digital assets.
— BitGo (@BitGo) June 22, 2023
The speculation about Prime Trust’s health was fueled by recent developments at the Nevada-based firm. In January, the firm quit service provision in Texas after previously withdrawing its application for a Texas Money Transmitter License (MTL). In the same month, the crypto custodian shredded one-third of its workforce, which were mostly staff members in the communication and compliance departments, according to CoinDesk.
Last week, Banq, a mobile software solutions provider and a subsidiary of Prime Trust, filed for bankruptcy in a US court in Nevada, declaring $17.72 million in assets and $5.4 million in liabilities. Prime Trust itself was initially primed for acquisition for the sum of $1.2 billion by Galaxy Digital by late 2021. However, the deal fell apart in August last year, with Prime Trust’s claim of $100 million in damages that was later dismissed by a court in Delaware.
Prime Trust Stops Deposits
Meanwhile, Prime Trust has ceased all deposits of fiat and crypto assets for custody, according to Stably, a company that provides stablecoins and fiat-to-crypto on-ramps. The move is in line with an order by the Nevada Financial Institution Division.
Cryptocurrency exchange Coinmetro also made a similar move, saying it “is currently unable to process new USD transactions."
⚠️ Important announcement: unexpected disruption in USD transactions. We regret to inform you that our partner for USD payments PrimeTrust has temporarily suspended USD deposits and withdrawals. This means that Coinmetro is currently unable to process new USD transactions.While…
— Coinmetro (@CoinMetro) June 22, 2023
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This article was written by Solomon Oladipupo at www.financemagnates.com.
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