Deal Cancelled: BitGo Pulls Out of Prime Trust Acquisition and Users Report Withdrawal Issues

Last updated:
Author
Author
Jai Pratap
About Author

Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: Pexels/Canva

BitGo, the American crypto custodian platform, has made the decision to cancel the acquisition of Prime Trust. 

Following this announcement, Prime Trust has taken measures to suspend withdrawals.

The cancellation of the deal comes just two weeks after BitGo signed a non-binding letter of intent to acquire Prime Trust.

The intended acquisition of Prime Trust by BitGo was expected to provide financial support to Prime Trust, which has been facing bankruptcy challenges.

Earlier this month, Banq, the payments subsidiary of Prime Trust, filed for bankruptcy protection in the United States. 

According to the bankruptcy filing, Banq has assets totaling $17.72 million and liabilities amounting to $5.4 million.

Prime Trust Finds No Relief  

Prime Trust has faced challenges recently, including replacing CEO Tom Pageler in November and staff layoffs in January. 

Adding to this, last year, crypto lending firm Celsius filed a pair of lawsuits to recover funds as it dealt with bankruptcy. Prime Trust was one of the targets in the lawsuits. 

Celsius alleged that Prime Trust improperly withheld the tokens when the two terminated their contract in June 2021.

In August last year, Prime Trust agreed to pay back crypto tokens worth $17 million to Celsius. 

TrueUSD Denies Exposure to Prime Trust

After reports emerged of Prime Trust suspending deposits and withdrawals on Thursday, TUSD issuer TrueUSD assured its customers that it has no exposure to the troubled crypto firm.

The USD-backed stablecoin issuer also stated that it no longer uses Prime Trust to mint or redeem the TUSD stablecoin and maintains “multiple USD rails” elsewhere. 

While TUSD issuer distanced itself from the troubled crypto custodian platform, crypto exchange CoinMetro had to suspend USD withdrawals on its platform as it uses Prime Trust as its payments partner. 

The exchange announced on Twitter that it has already started working on adding alternative payment partners to its ecosystem.

More Articles

Blockchain News
Customs Hold Bitmain Equipment, Disrupting U.S. Bitcoin Mining Supply Chains
Hongji Feng
Hongji Feng
2025-02-13 18:53:47
Blockchain News
Why Decentralized Data Is Needed As AI Matures
Rachel Wolfson
Rachel Wolfson
2025-02-13 18:32:26
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors