BitGo’s announcement of a non-binding letter of intent to acquire Prime Trust was followed by the termination of the acquisition just two weeks later.
On June 22, BitGo, a company that provides wallet infrastructure and digital asset custodial services, announced via Twitter that it has chosen to cancel its plan to acquire Prime Trust, a fintech infrastructure provider.
BitGo emphasized that this decision was not taken lightly and involved significant effort and deliberation. The company expressed its unwavering dedication to its mission of instilling trust in the realm of digital assets.
Just two weeks after BitGo revealed its non-binding letter of intent to acquire Prime Trust, the deal has been called off. While the exact terms of the agreement were not made public, the potential acquisition aimed to grant BitGo access to Prime Trust’s payment systems and cryptocurrency IRA fund.
Additionally, it presented an opportunity for BitGo to expand its wealth management offerings. However, the agreement has now been canceled, leading to a change in plans for both companies involved.
Moreover, if the acquisition had gone through, it would have been a notable milestone for BitGo as it aimed to integrate Prime Trust’s Nevada Trust Company into its existing network of regulated trust companies in different jurisdictions. This move would have represented a substantial expansion opportunity for BitGo.
On social media platform Twitter, unverified speculations suggested that the cancellation might be linked to Prime Trust receiving a cease and desist order from regulators in Nevada. However, the accuracy of these rumors remains unconfirmed as of now.
🚨BITGO WALKS AWAY FROM BAILOUT OF PRIME TRUST.
SOURCE: PRIME TRUST MAY BE FACING IMMINENT LEGAL ACTION BY STATE REGULATORS pic.twitter.com/e6iltdOGmq
— DIRTY BUBBLE MEDIA: GOOD LUCK, GOOD BYE. (@MikeBurgersburg) June 22, 2023
On June 13, it was revealed through court documents that Banq, the payments subsidiary of Prime Trust, had filed for bankruptcy protection in the United States. According to the bankruptcy filing, Banq disclosed assets valued at $17.72 million, while its liabilities amounted to $5.4 million. Interestingly, this occurred shortly after BitGo had expressed its intention to acquire Prime Trust on June 8.
It remains uncertain whether the timing of Banq’s bankruptcy filing had any adverse effects on BitGo’s proposed acquisition of Prime Trust, and further details are yet to emerge.
In recent times, Prime Trust has encountered notable difficulties. These include reports of letting go of around one-third of its workforce in January, which indicated a challenging situation for the company. Additionally, Prime Trust faced a scandal in Oregon last year.
It was discovered that the company had made a $500,000 contribution to the state Democratic Party, which was later linked to Nishad Singh, a former executive of FTX. These incidents have added to the complexities and controversies surrounding Prime Trust’s operations.
Important:Â This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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