In a surprising turn of events, BitGo has reached a preliminary agreement to acquire the parent company of Prime Trust. This noteworthy move may serve as a lifeline for Prime Trust, which has been in search of emergency funding to surmount its financial challenges. BitGo’s purchase entails taking up “100% of the equity of Prime Core Technologies, Inc., the parent company of Prime Trust,” though specific terms of the deal remain undisclosed.
In a frantic effort earlier this week, Prime Trust executives were attempting to raise around $25 million in financing before the weekend. Their struggle caught the attention of BitGo, a well-capitalized firm with various cryptocurrency business lines. For BitGo, the acquisition signifies an excellent opportunity to advance its technology stack amidst the prevailing climate of mergers and acquisitions within the industry.
Now, many are watching closely as a steady rise in scrutiny from the SEC and other regulators has led to a heightened interest in buying opportunities and distressed crypto companies. While the tentative deal is expected to be subject to further internal approvals, it currently remains unclear how the acquisition will affect Prime Trust’s employees.
BitGo CEO, Mike Belshe, has called the potential acquisition a “landmark transaction,” which he believes will spearhead a more secure and sustainable future for the digital asset landscape.
Upon concluding the acquisition, Prime Trust’s Nevada-registered trust company is to be consolidated with BitGo’s own regulated crypto-oriented trusts, located in Germany, New York, South Dakota, and Switzerland. This collaboration aims to integrate Prime Trust API products, further fortifying core BitGo products such as custody, settlement, and compliance functions.
Simultaneously, BitGo is set to benefit from Prime Trust’s exceptional network of banking partners, payment rails, crypto IRA, and additional wealth management offerings.
As the world of cryptocurrency continues to evolve, it will be interesting to observe how the BitGo-Prime Trust deal unfolds, and the potential impact it may have on the digital asset landscape at large. The acquisition not only highlights the significance of strategic partnerships but also underscores the importance of remaining agile and adaptive in this rapidly changing industry.
Source: Blockworks
