Digital assets custodian BitGo has decided to cancel its planned acquisition of crypto custody platform Prime Trust.
BitGo expressed that this decision was not taken lightly and emphasized its continued dedication to providing trust in digital assets. The termination of the agreement came two weeks after BitGo announced its letter of intent to buy Prime Trust.
BitGo anticipated gaining access to Prime Trust’s payment rails and cryptocurrency IRA fund, and the possibility of expanding wealth management services through the acquisition.
However, the specifics of the transaction were not publicly disclosed. Furthermore, including Prime Trust’s Nevada Trust Company would have expanded BitGo’s network of licensed trust businesses in other countries.
Unconfirmed rumors on Twitter suggested that Prime Trust received a cease and desist order from Nevada state officials, leading to the potential cancellation of the sale.
However, it was not possible to verify these rumors at the time. Court records revealed that Banq, a payments division of Prime Trust, filed for bankruptcy protection in US on June 13.
The bankruptcy case disclosed assets of $17.72 million and liabilities of $5.4 million. This development took place shortly after BitGo announced its intention to acquire Prime Trust on June 8.
It is unclear whether the timing of the bankruptcy filing harmed BitGo’s intended acquisition of Banq’s parent company. Prime Trust has faced various difficulties recently, including rumors of employee layoffs in January and involvement in a scandal in Oregon last year.
Therefore the scandal involved a $500,000 donation to the state Democratic Party, which was ultimately linked to Nishad Singh, a former executive of FTX.
