BitGo Cancels Acquisition of Crypto Custody Rival Prime Trust
• BitGo canceled its acquisition of rival Prime Trust after reaching a preliminary agreement earlier this month.
• Prime Trust has faced mounting concerns over its business, leading to the loss of clients and deposits.
• BitGo was almost bought by Galaxy Digital but the $1.2 billion deal was later canceled in August.
BitGo Cancels Acquisition of Rival Prime Trust
BitGo announced on Thursday that it was terminating its acquisition of rival Prime Trust, ending an agreement that had been reached earlier this month for an undisclosed amount. The decision to terminate the process came after „considerable effort and work to find a path forward with Prime Trust,“ according to BitGo’s tweet.
Prime Trust Struggling Amid Concerns Over Its Business
Prime Trust has been losing clients and deposits to competitors due to mounting concerns over its business, a source at one former client told CoinDesk. The firm replaced CEO Tom Pageler in November before laying off around a third of its staff just days after ceasing operations in Texas in January. Additionally, one of its subsidiaries filed for bankruptcy last week.
Galaxy Digital’s Acquisition Of BitGo Canceled
Cryptocurrency custodian BitGo was almost bought by Mike Novogratz’s crypto merchant bank Galaxy Digital (GLXY) until the $1.2 billion deal was canceled in August. Following the cancellation, BitGo took Galaxy to court for $100 million in damages which was dismissed by a Delaware judge earlier this month.
Stably & Coinmetro Announcements
After Bitgo’s tweet, crypto exchange Stably told customers that Prime Trust had halted all deposits and withdrawals by order of the Nevada Financial Institution Division while fellow crypto exchange Coinmetro said it could not process new U.S dollar transactions as Prime trust had suspended USD deposits and withdrawals.
The termination of the acquisition between BitGo and Prime trust is indicative of growing concern among investors over the latter firms‘ ability to provide reliable services as well as maintain customer confidence going forward which could ultimately lead to further losses for both parties involved if they fail to take corrective action soon enough