BitGo, a Crypto Custody Firm, Enters Preliminary Agreement to Acquire Prime Trust: Sources

Cryptocurrency custody company BitGo has reportedly entered into a preliminary agreement to acquire Prime Trust, another crypto custody expert that is regulated in Nevada, as per two individuals familiar with the situation.

One source has indicated that the agreement is in its initial phase and is awaiting regulatory approval.

Prime Trust had sparked speculation online, with rumors swirling about the firm's potential bankruptcy. Unfortunately, the undisclosed source did not provide any financial details regarding the deal.

BitGo chose not to provide any comments regarding the matter, while Prime Trust did not respond to requests for comment. However, according to the Wall Street Journal, a representative from Prime Trust confirmed the sale.

After this article was published, BitGo took to their official blog to confirm that they had signed a term sheet for the acquisition of Prime Core Technologies, the parent company of Prime Trust.

Prime Trust Interim CEO Jor Law hailed the development as "a significant enhancement for the industry." in a statement.

"No other company will have the breath of product and services nor depth of experience that this combined company would have. We are excited to offer our world-class infrastructure within a broader ecosystem and revolutionize the future of crypto," Law said.

BitGo CEO Mike Belshe said the move would position the firm "to enhance its best-in-class, trusted solutions and to service the combined customer base."

The demand for secure custody and storage of cryptocurrencies, especially among institutional customers and high net worth individuals, has propelled digital asset custody into the spotlight. Various options and companies in this space have garnered significant valuations. This matter has also caught the attention of the U.S. Securities and Exchange Commission (SEC), leading to proposed rulemaking concerning custody-related issues.

Prime Trust, a Las Vegas company, secured a substantial funding of $107 million in the middle of 2022, just before the crypto bear market took a toll. However, recent developments have been unfavorable for the firm. Towards the end of January this year, Prime Trust had to downsize its workforce by one-third and made the decision to halt its operations in Texas, where it had been actively seeking a money transmitter license.