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Crypto Custody Firm BitGo Cancels Acquisition of Rival Prime Trust
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.
Updated Jun 26, 2023, 3:28 p.m. Published Jun 22, 2023, 1:59 p.m.
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."
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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.
UPDATE (June 22, 14:10 UTC): Adds additional paragraph about Prime Trust losing clients and depositors and adds second byline.
UPDATE (June 22, 15:11 UTC): Adds Stably, Coinmetro announcements in fifth paragraph.
UPDATE (June 22, 15:57 UTC): Adds Prime Trust CEO loss, layoffs in third paragraph, cancellation of Galaxy's acquisition of BitGo in fifth.
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