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BitGo bails out Prime Trust in acquisition deal

source-logo  blockworks.co 08 June 2023 13:59, UTC

On Thursday, BitGo reached a preliminary agreement to acquire the parent company of Prime Trust. This marks a significant step forward in Prime Trust’s quest for emergency funding to address its financial challenges.

BitGo’s purchase, as denominated in a “non-binding term sheet,” snapped up “100% of the equity of Prime Core Technologies, Inc., the parent company of Prime Trust,” according to a BitGo statement. Terms of the deal were not disclosed.

Prime Trust executives this week had embarked on a whirlwind attempt to raise $25 million or so in financing by this weekend, two sources familiar with the matter told Blockworks.

For BitGo, a well-capitalized firm with a number of cryptocurrency business lines, the move looked to give the company a leg up in terms of its technology stack as mergers and acquisition interest remains rampant throughout the industry.

A number of distressed crypto companies in 2023, as well as strict oversight from the SEC and other regulators, has led industry participants to closely monitor the market for buying opportunities.

It wasn’t immediately clear on Thursday whether the tentative deal — which is presumably subject to additional internal approvals — would affect Prime Trust employees.

BitGo CEO Mike Belshe in the statement called the planned acquisition a “landmark transaction,” which he said would serve as the vanguard for a “greater shift in the digital asset landscape toward a more secure and sustainable future.”

The plan is for Prime Trust’s Nevada-registered trust company to be folded into BitGo’s own regulated crypto-oriented trusts. Those affiliated companies for BitGo are located in Germany, New York, South Dakota and Switzerland.

And the idea is to plug in Prime Trust API product’s to help “reinforce” core BitGo products — including custody, settlement and compliance functions.

In another development on Thursday, BitGo played up its pending access to Prime Trust’s “world-class network of banking partners and payment rails, crypto IRA, and additional wealth management offerings.”