BitGo’s plans to acquire Prime Trust, a prominent custody firm, have taken an unexpected turn as BitGo recently announced on Twitter the cancellation of the acquisition. The initial announcement had generated excitement within the industry, as the consolidation of these two major custodians was expected to have a significant impact on the industry landscape.
In the preliminary announcement, BitGo highlighted its intentions to provide business continuity, long-term stability and secure services to Prime Trust clients. Prime Trust, expressing its enthusiasm for the partnership, believed that the combined company would revolutionize the future of custody services. Jor Law, Prime Trust’s Interim CEO and President, stated, “No other company will have the breadth of product and services nor depth of experience that this combined company would have.”
However, after considerable efforts and discussions, BitGo made the “hard decision” to terminate the acquisition. Although BitGo did not provide specific reasons for this change of course, the company emphasized its commitment to delivering trust in digital assets. The termination of the deal raises questions about the future trajectory of Prime Trust, as there were many rumors about the firm’s liquidity prior to the acquisition announcement.
The original acquisition decision came amidst developments in the custody landscape, with Bitcoin-only exchanges Strike and Swan both announcing their departure from custody services provided by Prime Trust. Strike switched to utilizing its own custody services, while Swan transitioned to BitGo and Fortress Trust, which was founded by Scott Purcell, the former founder of Prime Trust.
While the termination of the acquisition raises speculation about the financial health of Prime Trust, the recent announcement did not address or confirm these rumors. The industry will now eagerly await further details and clarifications from both BitGo and Prime Trust regarding their future plans and strategies.