By Bitcoinist - 10 months ago - Reading Time: 2 minutes
BitGo Pending Acquisitions On Hold After Scrapping Prime Trust Purchase – What’s The Next Move?
Following the recent decision to abandon its proposed acquisition of Prime Trust, BitGo CEO Mike Belshe revealed that the cryptocurrency custodian has several other investments in the works.
In an interview with First Mover on Monday, Belshe stated:
We have pending acquisitions that I’m unable to announce at the moment, but I foresee consolidation taking place in this space over the next six months.
BitGo: Termination And Financial Troubles Surrounding Prime Trust
The termination of BitGo’s acquisition of Prime Trust on June 22 raised speculations about the target company’s financial troubles. This decision comes after reaching a preliminary agreement earlier this month.
In a tweet on Thursday, BitGo stated that they had exerted significant effort and work to explore a way forward with Prime Trust. However, they abandoned the acquisition, emphasizing their commitment to establishing trust in digital assets remains “unwavering.”
Prime Trust has encountered a series of challenges in recent months. In November, the company replaced its CEO, Tom Pageler.
Subsequently, in January, it faced workforce reductions, laying off approximately one-third of its staff, and ceased operations in Texas. Just last week, its subsidiary Banq filed for bankruptcy.
According to a source from one of its former clients, Prime Trust has been losing clients and deposits to competitors for several weeks as concerns regarding the company’s business continued to escalate.
Nevada’s Financial Institutions Division (FID) later confirmed that Prime Trust faced a shortfall in customer funds, leading to its inability to fulfill all withdrawal requests this month.
BitGo was previously on the verge of being acquired by Galaxy Digital (GLXY), a crypto merchant bank founded by crypto bull Mike Novogratz. However, the $1.2 billion deal was canceled in August.
Since then, Belshe revealed that BitGo has received occasional offers but is focused on expanding its business rather than being acquired by a major industry player.
Coinbase As A Potential Suitor In The Custody Sector
Coinbase (COIN) could be a potential suitor in the custody sector. It was chosen by BlackRock (BLK) as the custodian for its fund-management unit iShares’ proposed bitcoin exchange-traded fund (ETF).
Belshe noted:
Coinbase is a public company with a strong financial position, so they have an advantage as a first mover.
However, he suggested that Coinbase might face the challenge of separating its custody service from its trading business in the future.
Belshe further mentioned that BitGo is actively engaged in discussions with various entities in the industry, emphasizing that he has direct contact with BlackRock’s CEO, Larry Fink. This suggests BitGo’s involvement in negotiations with major players across the market.
Original source: Bitcoinist