- Crypto custodian BitGo has secured a deal to take over fellow custodian Prime Trust
- Prime Trust was thought to be on the verge of bankruptcy following a tough crypto winter
- BitGo will take on all Prime Trust’s assets and clients
Cryptocurrency custody company BitGo has signed a deal to buy out fellow custodian Prime Trust, which has been the subject of intense debate over its solvency. Following speculation from the Wall Street Journal and Coindesk over the deal, BitGo confirmed the deal in a blog post yesterday in which it confirmed it has signed a deal to acquire Prime Core Technologies, Inc., the parent company of Prime Trust. Rumors that Prime Trust needed $25 million to stay afloat began doing the rounds this week, albeit without much basis, but this point is now moot thanks to the deal.
Prime Trust’s Difficult Winter
Prime Trust was founded in 2016 in Las Vegas and grew to become a trusted custodian and trustee for a wide variety of personal and corporate trusts, making the most of the crypto boom. However, the company has endured a difficult six months following the crypto contagion and the bear market, with Celsius suing Prime Trust in August, alleging that Prime Trust had improperly withheld $17 million worth of cryptocurrencies the pair terminated their contract in June 2021.
Prime Trust agreed to hand back the coins, but this was a signal that things weren’t going too well.
CEO Swap Precipitates Sale
Another bigger signal that Prime Trust was struggling came when Tom Pageler was replaced as CEO in late 2022 by well-known fintech insider Jor Law, and the suggestion is that the company has spent the months since working out how to get out of a financial black hole.
Whether these rumors were true will now never be known following BitGo’s announcement and imminent takeover, although it seems that the issues at Prime Trust were clearly severe enough for it to have to agree to a buyout instead of continuing as a going concern.
Law said that the buyout will be a “significant enhancement for the industry,” claiming that “No other company will have the breadth of product and services nor depth of experience that this combined company would have.”