• BitGo, a crypto-custody firm, cancelled its acquisition of Prime Trust after the Nevada Department of Business and Industry found that Prime Trust had a shortfall in customer funds.
• Prime Trust has been struggling lately, replacing its CEO in November and laying off staff in January.
• BitGo’s decision was met with news from exchanges such as Stably and Coinmetro that they were unable to process USD deposits or withdrawals due to the suspension from Prime Trust.
BitGo Cancels Acquisition of Rival Prime Trust
Finance Crypto Custody Firm BitGo has cancelled its acquisition deal for rival firm Prime Trust following an order by the Nevada Department of Business and Industry finding that the company had a “shortfall in customer funds”. This news was met with responses from cryptocurrency exchanges Stably and Coinmetro that they were unable to process USD deposits or withdraws due to this suspension from Prime Trust.
Prime Trust Struggles
Prime Trust has been facing difficulties in recent months, replacing their CEO Tom Pageler in November before having to lay off around a third of their staff just days later when it ceased operations in Texas. To make matters worse, their subsidiary Banq filed for bankruptcy last week resulting in mounting concerns over its business among former clients.
Decision Was Not Made Lightly
Despite considerable effort on behalf of BitGo to find a path forward with PrimeTrust, they ultimately decided against acquiring them citing that “this decision was not made lightly” and that the organization remains committed to delivering trust through digital assets going forwards.
Impact On Exchanges
The news prompted responses from exchanges such as Stably who told customers that all deposits and withdrawals would be halted by order of the Nevada Financial Institution Division while Coinmetro also announced it was unable to process new U.S dollar transactions due to this suspension from PrimeTrust.
This latest update serves as yet another reminder of how important it is for businesses dealing with digital assets to pay attention to regulations set by government bodies if they wish to ensure continued success within this space going forwards.