The proposed acquisition deal was axed a fortnight after BitGo’s public unveiling of its non-binding letter of intent to purchase Prime Trust.

BitGo, the wallet infrastructure provider and digital asset custodian, made a public announcement on June 22, stating its decision to withdraw its acquisition plans for Prime Trust, a fintech infrastructure provider. BitGo emphasized that this decision was made after much consideration. The full announcement stated:

“Despite our concerted efforts to forge a feasible path forward with Prime Trust, BitGo has reluctantly decided to abort its acquisition plans. This decision has not been easy, but BitGo continues to uphold its commitment to our mission of fostering trust in digital assets.”

The decision to abort the deal comes barely two weeks after BitGo announced its non-binding letter of intent to purchase Prime Trust. Although the specifics of the agreement weren’t made public, the proposed deal between BitGo and Prime Trust was slated to give BitGo access to Prime Trust’s payment conduits and cryptocurrency IRA fund, enhancing its wealth management services.

Moreover, incorporating Prime Trust’s Nevada Trust Company into BitGo’s network of regulated trust companies across various jurisdictions would have marked a significant leap for the company.

Unsubstantiated chatter on Twitter suggested that the deal may have been terminated due to a rumored cease and desist order allegedly received by Prime Trust from Nevada state regulators. However, these speculations couldn’t be confirmed at the time.

Court documents revealed on June 13 that Banq, Prime Trust’s payments subsidiary, had filed for bankruptcy protection in the United States. Banq’s bankruptcy filing listed assets totaling $17.72 million and liabilities of $5.4 million. This event unfolded shortly after BitGo had voiced its intention to acquire Prime Trust on June 8. Whether the timing of the bankruptcy filing adversely affected BitGo’s acquisition plans for Banq’s parent company is still under review.

Recently, Prime Trust has also encountered significant setbacks, including reports of reducing its workforce by a third in January. In addition, Prime Trust was embroiled in a scandal in Oregon last year when it was identified as the origin of a $500,000 donation to the state Democratic Party, which was subsequently traced back to former FTX executive Nishad Singh.