BitGo CEO Reveals Delayed Acquisition Amidst Abandoned Prime Trust Deal

Following the recent decision to cancel its proposed acquisition of Prime Trust, BitGo CEO Mike Belshe has revealed that the cryptocurrency custodian is pursuing other investment opportunities. Belshe predicts consolidation in space over the next six months, indicating the potential for the industry’s upcoming developments.

Acquisition of Abandoned Prime Trust BitGo :

BitGo’s halt on its acquisition of Prime Trust on June 22 has sparked speculation about financial problems within the target company. Despite extensive efforts to find a way forward, BitGo announced they were abandoning the deal, reaffirming their steadfast commitment to building trust in digital assets. Prime Trust faces challenges, including a management change, workforce reductions, and the recent bankruptcy filing by its subsidiary Banq.

Customer Concerns and Drawbacks:

Concerns around Prime Trust’s business have led to losses of clients and deposits to competitors. The Nevada Division of Financial Institutions confirmed a customer’s lack of funds, resulting in the company’s inability to honor withdrawal requests. These developments raise questions about the financial stability and viability of Prime Trust in the market.

BitGo Acquisition Prospects and Industry Players :

BitGo previously faced an acquisition deal with Galaxy Digital, but it was cancelled. However, BitGo remains focused on growing its business and is actively engaged in discussions with various entities in the industry. Coinbase emerged as a potential suitor in the custodial sector, especially after being selected by BlackRock as the custodian for the proposed Bitcoin exchange-traded fund. Separating custodial services from its trading business could pose future challenges for Coinbase.

BitGo’s decision to walk away from the acquisition of Prime Trust has paved the way for potential upcoming acquisitions in the cryptocurrency custody space. The industry awaits further developments and potential partnerships with big players like Coinbase.