• BitGo cancelled its acquisition of crypto custody firm Prime Trust after the company failed to meet withdrawal requests.
• Prime Trust lost customers and deposits due to mounting concerns over its business and filed for bankruptcy last week.
• As a result, other crypto exchanges suspended USD deposits and withdrawals with Prime Trust by order of the Nevada Financial Institution Division.
BitGo Cancels Acquisition of Rival Crypto Custody Firm Prime Trust
Prime Trust Failing to Meet Withdrawal Requests
Crypto custody firm Prime Trust has “a shortfall in customer funds” and was unable to meet all withdrawal requests this month, according to the Nevada Department of Business and Industry. The regulator ordered Prime Trust to cease all activities which violate Nevada regulations.
BitGo Terminates Acquisition Process
Cryptocurrency custodian BitGo terminated its acquisition of rival Prime Trust earlier this month after reaching a preliminary agreement to acquire the firm for an undisclosed amount amid speculation it was facing bankruptcy. BitGo ended the process after “considerable effort and work to find a path forward with Prime Trust,” the firm tweeted on Thursday .
Other Exchanges Suspend USD Deposits & Withdrawals
Following BitGo’s tweet, crypto exchange Stably told customers that Prime Trust was halting all deposits and withdrawals by order of the Nevada Financial Institution Division. Fellow crypto exchange Coinmetro also said it was unable to process new U.S. dollar transactions because Prime Trust had suspended USD deposits and withdrawals.
PrimeTrust’s Struggles Prior To Acquisition Talks
PrimeTrust replaced CEO Tom Pageler in November, and in January laid off around a third of its staff just days after ceasing operations in Texas . Its subsidiary Banq filed for bankruptcy last week. The firm has been losing clients and deposits to competitors for weeks amid mounting concerns over its business, a source at one former client told CoinDesk.
BitGo Committed To Its Mission Despite Cancellation
Palo Alto-based BitGo remains committed to its mission despite cancelling the acquisition process saying they made their decision not lightly but remain dedicated their mission “to deliver trust in digital assets”