On June 22, wallet infrastructure provider and digital asset custodian BitGo announced on Twitter that it had decided to cancel its acquisition of fintech infrastructure provider Prime Trust. According to BitGo, “This decision was not made lightly.” The full announcement read:
“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’s deal cancellation comes merely two weeks after it shared its non-binding letter of intent to acquire Prime Trust. Although the specific details of the agreement were not disclosed, the potential acquisition between BitGo and Prime Trust was poised to provide BitGo with access to Prime Trust’s payment rails and cryptocurrency IRA fund, and the opportunity to broaden its wealth management services.
Additionally, integrating Prime Trust’s Nevada Trust Company into BitGo’s network of regulated trust companies across various jurisdictions would have marked a significant expansion for the company.
Unconfirmed rumors on Twitter speculated that the deal may have been called off due to a cease and desist order Prime Trust allegedly received from Nevada State regulators. However, these rumors could not be verified at this time.
SCOOP: PRIME TRUST RECEIVED CEASE AND DESIST ORDER FROM NEVADA STATE REGULATORS.
PRIME IS HALTING ALL WITHDRAWALS OF FIAT AND CRYPTO EFFECTIVE IMMEDIATELY. https://t.co/0rLzOGZXlR pic.twitter.com/gsRYevAmJM
— DIRTY BUBBLE MEDIA: GOOD LUCK, GOOD BYE. (@MikeBurgersburg) June 22, 2023
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On June 13, court documents revealed that Banq, the payments subsidiary of Prime Trust, had filed for bankruptcy protection in the United States. The bankruptcy filing by Banq disclosed assets amounting to $17.72 million and liabilities of $5.4 million. This development occurred shortly after BitGo had expressed its intent to acquire Prime Trust on June 8. It is yet to be determined if the timing of the bankruptcy filing had a negative impact of BitGo’s proposed acquisition of Banq’s parent company.
Prime Trust has also faced significant challenges in recent times, including reports of laying off a third of its staff in January. Furthermore, last year, Prime Trust found itself embroiled in a scandal in Oregon. It was revealed to be the source of a $500,000 contribution to the state Democratic Party, which was later traced back to former FTX executive Nishad Singh.
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