BitGo is pulling out of acquisition talks with rival Prime Trust.
On Thursday June 22, digital asset management firm Bitgo announced that it was pulling out of an acquisition deal of rival firm, Prime Trust.
Bitgo said that the decision to withdraw was not made lightly.
Bitgo cancels Prime Trust acquisition
Bitgo’s plans to acquire digital assets custody firm, Prime Trust, have taken an unexpected turn. The firm announced this decision on Twitter without going deep into the specifics.
Bitgo only said that the decision was “not made lightly”, and that they were committed to doing business.
“After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust,” read the tweet.
The short-lived deal came after the duo had reached a preliminary agreement for Bitgo to acquire the firm for an undisclosed fee amidst speculation that Prime Trust was going bankrupt.
Though, the details of the original deal wasn’t revealed the acquisition was speculated to provide Bitgo with access to Prime Trust’s payment rails and crypto IRA fund and also to widen its wealth management offers.
Unverified report have pointed to the cease and desist order that Prime Trust received from Nevada regulators as the reason behind the break down of the deal.
However, on June 13, Banq, the payment subsidiary of Prime Trust had filed for bankruptcy protection in the US. The filing revealed that Banq had $17.72M in assets, and $5.4M in liabilities.
Also, on June 19, the Twitter account of the stablecoin project TUSD revealed that “minting through Prime Trust is still temporarily paused” while referencing an atmosphere of “uncertainty.”
Prime Trust seems to have halted withdrawals
While Prime Trust is yet to respond to the news, customers have shared what appears to be an email from Prime Trust informing users that they were halting withdrawals of digital assets and fiat currencies.
While the current state of Prime Trust is unknown, it remains the last man standing among the four crypto banks. Silvergate, Silicon Valley Bank, and Signature Bank were the three banks that operated as crypto-friendly banks within the traditional banking system. But in the last few months, all three have succumbed to regulatory pressure or fell to harsh market conditions.
Prime Trust appears to have been battling challenges too. In January, the firm laid off a third of its staff. With the termination of the deal, the financial health of the company is questionable
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