BitGo, a cryptocurrency custody firm, has entered into a preliminary agreement to acquire Prime Trust, a regulated crypto custody specialist based in Nevada, according to sources familiar with the matter. However, the deal is still subject to regulatory approval. Earlier, there were speculations online about Prime Trust facing bankruptcy. The financial details of the acquisition were not disclosed.
BitGo declined to comment on the matter, while Prime Trust did not respond to requests for comment. However, the Wall Street Journal reported that a representative from Prime Trust confirmed the sale. Subsequently, BitGo confirmed the acquisition in a blog post, stating that it had signed a term sheet to acquire Prime Core Technologies, the parent company of Prime Trust.
Jor Law, the Interim CEO of Prime Trust, expressed his enthusiasm for the move, calling it a significant enhancement for the industry. He mentioned that the combined company would have an unparalleled range of products, services, and experience. Law stated that they were excited to offer their world-class infrastructure within a broader ecosystem and revolutionize the future of cryptocurrency.
BitGo CEO Mike Belshe highlighted that the acquisition would enable the company to strengthen its trusted solutions and cater to the combined customer base effectively.
The demand for secure storage and custody solutions for cryptocurrencies, especially among institutional customers and high net worth individuals, has elevated the significance of digital asset custody. Numerous companies provide various custody options, leading to high valuations in the sector. The U.S. Securities and Exchange Commission (SEC) has also addressed custody concerns and proposed regulatory rules on the matter.
Prime Trust, headquartered in Las Vegas, secured $107 million in funding in mid-2022, but has faced challenges amid the cryptocurrency bear market. The firm downsized its workforce by a third in January and announced the discontinuation of operations in Texas, where it was pursuing a money transmitter license.
