Javier Hernandez In a recent development, Bitgo, a digital asset trust firm, has announced its intention to acquire Prime Trust, a crypto custodian based in Nevada. The acquisition, if successful, will integrate Prime Trust into Bitgo’s network of regulated trust companies, strengthening its position in the industry.
Bitgo Signals Acquisition Interest in Prime Trust Amidst Industry Speculation
Bitgo has confirmed that it has signed a letter of intent expressing its interest in acquiring Prime Trust, a renowned crypto custodian. This announcement comes in response to speculative discussions and rumors circulating on social media, hinting at financial difficulties and potential bankruptcy faced by Prime Trust. Notably, last year, Prime Trust was involved in a legal dispute with the now-defunct crypto lender Celsius, accusing the custodian of failing to return $17 million worth of crypto assets in August 2022.
In October 2022, Prime Trust agreed to return the $17 million, stating that it would transfer the funds to a wallet specified by Celsius. Before Celsius’ complaint in August, Prime Trust had successfully raised $107 million during a Series B funding round in June. The company had also raised $65 million in a Series A round in July 2021. However, following the challenging market conditions in 2022, two anonymous sources claimed that Prime Trust had laid off one-third of its employees in early 2023.
On June 8, 2023, Bitgo revealed its plans to acquire Prime Trust and gain complete equity from its parent company, Prime Core Technologies.
“This transaction marks a significant milestone, driving a broader transformation in the digital asset landscape toward a more secure and sustainable future,” said Mike Belshe, CEO and co-founder of Bitgo. “By acquiring Prime Trust, Bitgo is poised to enhance its industry-leading, trusted solutions and cater to an expanded customer base.”
Prime Trust has established collaborations with notable entities such as Abra, Okcoin, Augeo, Swan Bitcoin, and Trusttoken. Swan Bitcoin recently disclosed its decision to shift its assets under the custody of Fortress Trust and Bitgo. Speculation has arisen on social media regarding Scott Purcell’s involvement in founding both Prime Trust—where he served for over five years until August 2021—and Fortress Trust in October 2021. However, Purcell clarified in a Linkedin post that there is no connection between the two companies, emphasizing his departure from Prime Trust two years earlier.
“There is absolutely no connection between Fortress Trust and Prime Trust,” wrote Purcell. “In fact, we sometimes find ourselves competing with them. We are a distinct company, from our executive team to our technological infrastructure.”
Bitgo announced on Thursday that integrating Prime Trust’s infrastructure and exchange network will strengthen its offerings in terms of “custody, liquidity, settlement, and regulatory compliance.” Furthermore, if the acquisition is finalized, the Palo Alto-based firm will gain Prime Trust’s banking partners, crypto IRA, and existing payment networks. “The combination of Prime Trust and Bitgo would be a significant advancement for the industry,” stated Jor Law, Prime Trust’s interim CEO and president.
What are your thoughts on Bitgo’s proposed acquisition of Prime Trust? Share your opinions and insights in the comments section below.
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Frequently Asked Questions (FAQs) about digital asset trust
What is Bitgo’s planned acquisition of Prime Trust?
Bitgo, a digital asset trust firm, intends to acquire Prime Trust, a crypto custodian based in Nevada. This acquisition aims to strengthen Bitgo’s services and expand its network of regulated trust companies, enhancing their offerings in the digital asset industry.
What led to the speculation about Prime Trust’s financial struggles?
Speculation about Prime Trust’s financial struggles arose from rumors circulating on social media. Additionally, the company faced a legal dispute with Celsius, a crypto lender, over the alleged failure to return $17 million in crypto assets. These factors contributed to the speculation and discussions surrounding Prime Trust’s financial situation.
How will the acquisition benefit Bitgo and Prime Trust?
The acquisition will benefit Bitgo by integrating Prime Trust’s infrastructure and exchange network, bolstering their offerings in custody, liquidity, settlement, and regulatory compliance. Bitgo will also gain access to Prime Trust’s banking partners, crypto IRA, and existing payment networks. For Prime Trust, becoming part of Bitgo’s network of regulated trust companies can provide stability and opportunities for growth within the industry.
What impact will the acquisition have on the digital asset landscape?
The acquisition signifies a shift in the digital asset landscape towards a more secure and sustainable future. By combining their resources and expertise, Bitgo and Prime Trust aim to offer enhanced and trusted solutions to their combined customer base. This acquisition could lead to advancements in the industry, benefiting investors and further establishing confidence in digital asset custodianship.
Are there any concerns regarding the acquisition?
While the acquisition presents exciting opportunities, some concerns may arise regarding the integration of Prime Trust’s operations into Bitgo’s network. Ensuring a smooth transition and addressing any potential challenges will be crucial. Additionally, stakeholders will monitor how the acquisition affects the industry landscape and the customers of both Bitgo and Prime Trust.
More about digital asset trust
- Bitgo
- Prime Trust
- Celsius
- Bitgo and Prime Trust Acquisition Announcement
- Legal Dispute Between Prime Trust and Celsius
- Bitgo’s Services and Offerings
- Regulatory Compliance in the Digital Asset Industry
- Importance of Custodianship in the Crypto Space
