BitGo’s acquisition of Prime Trust was unexpectedly terminated on Thursday, according to industry sources, because of persistent issues with Prime Trust’s deposits.
BitGo clarified on Twitter that it has made the “hard decision” to terminate its acquisition of Prime Trust after “considerable effort and work” to find a way to proceed with the deal.
BitGo’s decision to cancel its acquisition of Prime Trust comes barely two weeks after the business announced that it would be buying the firm.
The suspension of deposits by Prime Trust, which occurred just after the firm reached a tentative agreement to be acquired by BitGo, has cast doubt on the deal’s future.
Prime Trust, a US-based cryptocurrency company that provides on- and off-ramps from fiat to digital assets, has lately run into financial issues. In early June, the firm, which also provides crypto custodial services, was racing to get millions of dollars in emergency funding.
Prime Trust, a US-based cryptocurrency company that facilitates the transfer of fiat currency to and from digital assets, is struggling financially.
The Nevada-based crypto payment processor Banq filed for Chapter 11 bankruptcy on Tuesday, citing liabilities of over $5 million and assets worth more than $17.7 million.
TrueUSD issued a statement shortly after BitGo’s announcement that Prime Trust had suspended all fiat and crypto deposits. TrueUSD emphasized that TUSD was unaffected by this decision and that the stablecoin had previously halted minting on Prime Trust until further notice.
Prime Trust has been facing several challenges, including layoffs and a scandal.
The news of BitGo’s withdrawal from the deal is a reminder that even the most established companies in the cryptocurrency industry are not immune to risk and that investors should carefully consider the security of their digital assets before entrusting them to a custodian.