BitGo reaches deal to buy crypto custodian Prime Trust

Quick Take

  • BitGo has reached a preliminary deal to buy crypto custodian Prime Trust.

BitGo Holdings said Thursday that it had signed a non-binding term sheet to acquire 100% of the equity of Prime Core Technologies, the parent company of crypto custodian Prime Trust.

"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 in a statement. The deal was first reported by CoinDesk. 

BitGo said the deal would bring business continuity and long-term stability to clients of Prime Trust, whose Nevada Trust Company will join BitGo’s network of regulated trust companies in South Dakota, New York, Germany and Switzerland.

Terms of the agreement weren't disclosed. The deal would still require regulatory approval, CoinDesk said.

Founded in 2016, Las Vegas, Nevada-based Prime Trust offers various developer tools and APIs to crypto companies, including for custody, payment rails, compliance, liquidity and settlement. Last year, Prime Trust raised $107 million in Series B funding from investors that included Kraken Ventures, FIS Impact Ventures and Fin Capital.

Prime Trust provided services to Binance.US, FTX

Prime Trust started offering services to crypto companies in 2018. The firm has said it served nearly 700 fintech and crypto clients last year but lost several clients recently, including the Binance.US. exchange that was sued by the U.S. Securities and Exchange Commission earlier this week for allegedly violating the country's securities laws, among other charges.

The SEC lawsuit mentions a “Trust Company B,” which has drawn speculation on social media that it could be Prime Trust. The company didn't immediately respond to a request for comment from The Block earlier Thursday. 

"Trust Company B is a Nevada-based trust company. In or around July 2019, BAM Trading [d/b/a Binance.US] entered into an agreement with Trust Company B to provide certain services to customers purchasing crypto assets on the Binance.US Platform with U.S. dollars," the SEC complaint notes.

Prime Trust also provided services to the FTX exchange, which collapsed last November.

Shortly after FTX's bankruptcy, Prime Trust abruptly replaced its then-CEO Tom Pageler with interim CEO Jor Law. Earlier this year, Prime Trust cut jobs and suspended its business operations in Texas after withdrawing its applications to receive a money transmitter license in the state.

(Updates with statement from BitGo.)

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