Crypto custodian BitGo terminates its deal to buy Prime Trust

According to the statement, the decision was made due to the impossibility of further cooperation

22.06.2023 - 16:25

2 min

Prime Trust has been losing clients and deposits to competitors for weeks amid mounting concerns over its business, a source at one former client told CoinDesk.

Cryptocurrency custodian BitGo terminated its acquisition of rival Prime Trust after earlier this month reaching a preliminary agreement to acquire the firm for an undisclosed amount amid speculation it was facing bankruptcy.

BitGo ended the process after "considerable effort and work to find a path forward with Prime Trust," the firm tweeted on Thursday. "This decision was not made lightly and BitGo remains committed to our mission to deliver trust in digital assets."

Prime Trust has had a rocky journey in recent months. It replaced CEO Tom Pageler in November, and in January laid off around a third of its staff just days after ceasing operations in Texas. Its subsidiary Banq filed for bankruptcy last week. The firm has been losing clients and deposits to competitors for weeks amid mounting concerns over its business, a source at one of its former clients told CoinDesk.

Following BitGo's tweet, crypto exchange Stably told customers that Prime Trust was halting all deposits and withdrawals by order of the Nevada Financial Institution Division. Fellow crypto exchange Coinmetro also said it was unable to process new U.S. dollar transactions because Prime Trust had suspended USD deposits and withdrawals.

Palo Alto, California-based BitGo was itself almost bought by Mike Novogratz's crypto merchant bank Galaxy Digital (GLXY), until the $1.2 billion deal was canceled in August. BitGo took Galaxy to court for $100 million in damages in a case that was dismissed by a Delaware judge earlier this month.

The firms did not respond to CoinDesk's request for further comment.

This material is taken from the website https://www.coindesk.com.

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