Two weeks after BitGo officially announced its non-binding letter of intent to buy Prime Trust, the transaction was terminated.
The custodian of digital assets and provider of wallet infrastructure BitGo stated on Twitter on June 22 that it had decided not to proceed with the acquisition of Prime Trust. BitGo states that “This decision was not made lightly.” The complete announcement stated:
“BitGo has made the difficult decision to terminate its acquisition of Prime Trust after extensive effort and work to find a way ahead with Prime Trust. This choice was not taken lightly, and BitGo remains committed to our aim of delivering trust in digital assets.”
Just two weeks after releasing its non-binding letter of intent to purchase Prime Trust, BitGo terminated the agreement. The proposed acquisition between BitGo and Prime Trust was expected to give BitGo access to Prime Trust’s payment rails and cryptocurrency IRA fund as well as the opportunity to expand its wealth management services, even if the specifics of the transaction were not made public.
Additionally, BitGo would have experienced a huge expansion if Prime Trust’s Nevada Trust Company had been added to BitGo’s network of regulated trust companies in various countries.
Unconfirmed rumours on Twitter hinted that the deal might have been terminated because Prime Trust allegedly received a cease-and-desist order from Nevada regulators. These rumours, however, could not be confirmed at this time.
🚨🚨SCOOP: PRIME TRUST RECEIVED CEASE AND DESIST ORDER FROM NEVADA STATE REGULATORS.
PRIME IS HALTING ALL WITHDRAWALS OF FIAT AND CRYPTO EFFECTIVE IMMEDIATELY. https://t.co/0rLzOGZXlR pic.twitter.com/gsRYevAmJM
— DIRTY BUBBLE MEDIA: GOOD LUCK, GOOD BYE. (@MikeBurgersburg) June 22, 2023
According to court files, Banq, a payments division of Prime Trust, filed for bankruptcy protection in the US on June 13. Banq disclosed assets at $17.72 million and liabilities worth $5.4 million in their bankruptcy case. This development happened shortly after BitGo announced on June 8 that it intended to purchase Prime Trust. It has not yet been established whether BitGo’s intended acquisition of Banq’s parent firm was negatively impacted by the timing of the bankruptcy filing.
In recent years, Prime Trust has also encountered many difficulties, including claims that it fired a third of its workforce in January. Additionally, Prime Trust became involved in a scandal in Oregon last year. It turned out to be the source of a $500,000 donation to the state Democratic Party, which was eventually linked to Nishad Singh, a former executive of FTX.