The acquisition would enhance BitGo's service portfolio.
BitGo, a digital asset trust company and security company, plans to purchase fintech infrastructure provider Prime Trust.
The prospective acquisition, revealed through a non-binding letter of intent signed on June 8th, would boost BitGo's wealth management offerings and reinforce its presence in the crypto custodian market.
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Despite keeping the terms of the agreement under wraps, BitGo's acquisition would, if concluded successfully, encompass Prime Trust's cryptocurrency IRA fund and payment channels.
The acquisition would further enhance BitGo's service portfolio by integrating Prime Trust’s Nevada Trust Company into its network of regulated trust establishments across South Dakota, New York, Germany, and Switzerland.
The proposed acquisition would also allow Prime Trust’s API infrastructure and exchange network to align with BitGo services. As BitGo stated in their announcement:
This acquisition makes BitGo the first global digital asset company to provide a full suite of solutions for institutions and fintech platforms.
The BitGo-Prime Trust merger plan appears at a critical time, with the United States Securities and Exchange Commission proposing regulatory modifications that could challenge crypto companies' ability to safeguard customer funds as custodians.
The landscape of the crypto custody market is witnessing significant changes, influenced by both technological developments and strategic acquisitions. For instance, Ripple recently purchased the Swiss digital asset custody provider Metaco for $250 million.
Notably, BitGo itself was on the verge of being purchased by Galaxy Digital for a whopping $1.2 billion last year. After the deal fell through, a legal dispute ensued between BitGo and Galaxy Digital.
BitGo's potential acquisition of Prime Trust underscores the fluid and dynamic nature of the crypto custodian market, underscoring the increasing importance of strategic mergers and acquisitions in the crypto space.
