• BitGo has canceled its acquisition of Prime Trust, a rival crypto custody firm.
• Prime Trust has been losing clients and deposits to competitors due to mounting concerns over its business.
• The Nevada Department of Business and Industry has ordered Prime Trust to cease all activities that violate Nevada regulations, causing Stably and Coinmetro to halt deposits and withdrawals.
BitGo Cancels Acquisition of Rival Crypto Custody Firm
Finance crypto custody firm BitGo has canceled its acquisition of rival Prime Trust after earlier this month reaching a preliminary agreement to acquire the firm for an undisclosed amount amid speculation it was facing bankruptcy.
Prime Trust Losing Clients and Deposits
Prime trust has been losing clients and deposits to competitors for weeks amid mounting concerns over its business, a source at one former client told CoinDesk. In January, the firm laid off around a third of its staff just days after ceasing operations in Texas. Its subsidiary Banq filed for bankruptcy last week.
Nevada Department Orders Cease All Activities
The Nevada Department of Business and Industry ordered Prime Trust to cease all activities which violate Nevada regulations. Fellow crypto exchange Coinmetro also said it was unable to process new U.S. dollar transactions because Prime Trust had suspended USD deposits and withdrawals.
BitGo Remains Committed To Mission
BitGo ended the process after “considerable effort and work to find a path forward with Prime Trust,” the firm tweeted on Thursday . “This decision was not made lightly and BitGo remains committed to our mission to deliver trust in digital assets.”
Cryptocurrency custodian BitGo terminated its acquisition of rival Prime Trust as it could not meet all withdrawal requests this month due to having “a shortfall in customer funds” according to the state regulator who then ordered them to cease all activities which violate Nevada regulations.