In a surprising turn of events, wallet infrastructure provider and digital asset custodian BitGo announced the termination of its acquisition of fintech infrastructure provider Prime Trust on Twitter. The sudden cancellation came only two weeks after BitGo disclosed its non-binding letter of intent to acquire Prime Trust, stating that the decision was “not made lightly.”
The potential acquisition between BitGo and Prime Trust was set to provide BitGo with access to Prime Trust’s payment rails, cryptocurrency IRA fund, and wealth management services expansion. Furthermore, integrating Prime Trust’s Nevada Trust Company into BitGo’s network of regulated trust companies across various jurisdictions would have marked significant growth for the company.
Rumors on Twitter speculated that the deal may have been called off due to a cease and desist order Prime Trust allegedly received from Nevada State regulators. However, these claims have not been verified at this time.
Banq, the payments subsidiary of Prime Trust, filed for bankruptcy protection in the United States, disclosing assets of $17.72 million and liabilities of $5.4 million. This development occurred shortly after BitGo expressed its intent to acquire Prime Trust on June 8. The timing of the bankruptcy filing remains unclear as to whether it negatively impacted BitGo’s proposed acquisition of Banq’s parent company.
Prime Trust has faced significant challenges in recent times, with reports of laying off a third of its staff in January. Additionally, in 2022, Prime Trust was implicated in a scandal in Oregon as the source of a $500,000 contribution to the state Democratic Party, traced back to former FTX executive Nishad Singh.
With the acquisition no longer happening, it remains to be seen how BitGo and Prime Trust will move forward independently, and whether the rumored cease and desist order played a role in their decision. Despite the termination of the acquisition, BitGo stated that they remain committed to their mission to deliver trust in digital assets.
Source: Cointelegraph
