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In a recent development, Bitgo, the digital asset trust firm, disclosed that it has penned a letter of intent to acquire Prime Trust, a crypto custodian based in Nevada. Should the acquisition proceed, Prime Trust would become an integral part of Bitgo’s network of regulated trust companies.
Bitgo reports that they have signed a letter indicating their intent to acquire Prime Trust. The announcement follows speculative chatter and multiple rumors on social media that suggest Prime Trust was grappling with financial struggles and potential bankruptcy. Last year, Prime Trust found itself in a legal dispute with the now-defunct crypto lender Celsius after they accused the custodian of failing to return $17 million in crypto assets in August 2022.
In October 2022, Prime Trust consented to return the $17 million and stated that it would transfer the funds to a wallet designated by Celsius. Prior to Celsius’ grievance in August, the custodian had secured $107 million during a Series B funding round over a month earlier in June. Preceding the Series B, Prime Trust’s Series A round raised $65 million in July 2021. Following the crypto winter in 2022, however, two unnamed sources reported that Prime Trust laid off one-third of its employees in early 2023.
On June 8, 2023, Bitgo unveiled its intention to procure Prime Trust and obtain full equity from parent company Prime Core Technologies.
“This is a landmark transaction, leading a greater shift in the digital asset landscape toward a more secure and sustainable future,” Bitgo CEO and co-founder Mike Belshe said on Thursday. “With the expected acquisition of Prime Trust, Bitgo is well positioned to enhance its best-in-class, trusted solutions and to service the combined customer base.”
Prime Trust collaborated with entities such as Abra, Okcoin, Augeo, Swan Bitcoin, and Trusttoken. Swan Bitcoin disclosed this May that it had shifted its assets into custody with Fortress Trust and Bitgo. Speculation has also circulated on social media regarding Scott Purcell founding both Prime Trust — which he left in August 2021 after over five years — and Fortress Trust in October 2021. In a Linkedin post, Purcell rejected any connection between the two companies, highlighting he exited Prime Trust two years prior.
“There is absolutely zero connection between Fortress Trust and Prime Trust,” Purcell wrote. “Quite the opposite as at times we find ourselves competing with them. We are a very different company, from our exec team to our technology infrastructure.”
On Thursday, Bitgo announced that incorporating Prime Trust’s infrastructure and exchange network will fortify Bitgo’s offerings in terms of “custody, liquidity, settlement, and regulatory compliance.” Additionally, the Palo Alto-based firm will acquire Prime Trust’s banking partners, crypto IRA, and existing payment networks if the acquisition materializes. “The combination of Prime Trust and Bitgo would be a significant enhancement for the industry,” stated Jor Law, Prime Trust’s interim CEO and president on Thursday.
