Cryptocurrency custodian BitGo is pulling out of acquisition talks with rival Prime Trust, putting the short-lived deal to an end. 

BitGo announced the decision to walk away in a tweet on Thursday. Without going into specifics, the company said the decision was "not made lightly", and that it was committed to business as usual. 

"After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust,” read the tweet. 

Around the same time BitGo made its announcement, social media users were sharing images of what appeared to be an email from Prime Trust to its customers. It announced a halt to all withdrawals for digital assets and fiat currencies. The message said the pause was a response to a cease and desist order Prime Trust received from financial regulators in Nevada. 


Prime Trust has yet to comment on the announcement. Neither it nor BitGo immediately responded to a request for comment from DecryptMeanwhile, crypto exchange CoinMetro has had to suspend U.S. dollar withdrawals on its platform because it uses Prime Trust as its payments partner.

Coinmetro announced on Twitter today that clients should be aware of “unexpected disruption in USD transactions.” The company said it is “working diligently on adding alternative payment partners to their ecosystem.”

On its platform, Prime Trust lists a number of cryptocurrencies that it supports, including Bitcoin, Ethereum, Litecoin, and Tether.


Not long after news of the Nevada investigation broke, stablecoin issuer TrueUSD released a statement on Twitter to reassure customers that their TUSD was unaffected by the freeze."#TUSD is not affected by this situation. We have no exposure to Prime Trust and maintain multiple USD rails for minting and redemption. Rest assured, all your funds are safe with TUSD," the company tweeted.

Other Twitter users asked in the replied to the announcement asking which payment rails the company uses, but it has yet to clarify.

Although the state of its current financial situation is a matter of speculative concern, Prime Trust remains the last of the four “crypto banks” left standing. Silvergate, Silicon Valley and Signature Bank were the three other crypto-friendly institutions that operated within the legacy banking system. But in the past couple months, there have been allegations that regulators were picking them off one by one because of their ties to the industry.

This canceled acquisition marks an inglorious end to an acquisition that only went into motion two weeks ago. 

On June 8, BitGo announced that it signed a letter of intent to acquire its rival. The deal would have involved acquiring the entire equity of parent company Prime Core Technologies Inc.. The deal also would have seen an integration of the two companies' technical infrastructure on top of a sharing of BitGo’s banking services. 

Not long after the deal was announced, trouble began to brew. 

Less than a week after the deal was struck, Banq, a Nevada-based crypto payments and savings platform and Prime Trust subsidiary, filed for bankruptcy following allegations of mismanagement and legal woes. In its bankruptcy documents, Banq listed $17.72 million in assets and $5.4 million of liabilities.


Two days later on June 16, another blow came when crypto investment company Abra was hit with a cease and desist order from Texas regulators, and accusations of securities fraud. Prime Trust acted as the main custodian from Abra, who is said to have had $49 million in assets under management (AUM) as of May.

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