BitGo to Acquire Regulated Crypto Custodian Prime Trust in Preliminary Deal
BitGo Enters Preliminary Agreement to Purchase Prime Trust
Cryptocurrency custody firm BitGo is set to acquire Prime Trust, another regulated crypto custodian based in Nevada, in a preliminary deal, according to sources familiar with the matter.
Regulatory Approval and Speculation Surrounding Prime Trust
The agreement is still subject to regulatory approval, as confirmed by one source. Speculation had circulated online regarding Prime Trust, with some suggesting the firm was facing bankruptcy. However, the financial details of the deal have not been disclosed by the sources.
BitGo Confirms Term Sheet Acquisition
Following the publication of the initial report, BitGo officially confirmed in a blog post that it had signed a term sheet to acquire Prime Core Technologies, the parent company of Prime Trust.
Positive Response from Prime Trust and BitGo CEOs
Prime Trust Interim CEO Jor Law expressed enthusiasm about the acquisition, stating that the combined company would offer an unmatched range of products, services, and experience. He described it as a significant enhancement for the industry and expressed excitement about revolutionizing the future of crypto.
BitGo CEO Mike Belshe emphasized that the acquisition would enable the firm to enhance its trusted solutions and serve the expanded customer base effectively.
Digital Asset Custody and Regulatory Attention
The growing demand for secure storage of cryptocurrencies, particularly among institutional customers and high net worth individuals, has propelled digital asset custody into the spotlight. Numerous custodial solutions are available, and companies in this sector have been commanding high valuations. The U.S. Securities and Exchange Commission (SEC) has also focused on custody issues, releasing proposed rulemaking related to this area.
Prime Trust's Recent Challenges
Prime Trust, headquartered in Las Vegas, raised $107 million in funding in mid-2022. However, the firm faced difficulties, including workforce reduction at the beginning of this year and the decision to cease operations in Texas, where it was pursuing a money transmitter license.
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