First, it noted that Prime Trust’s Nevada Trust Company will join BitGo’s global network of regulated trust companies, which already includes entities in South Dakota, New York, Germany and Switzerland. In addition, the expansion would enhance BitGo’s presence and regulatory reach. Furthermore, the blog described how Prime Trust’s fintech API infrastructure and exchange network will reinforce BitGo’s existing services, including custody, liquidity, settlement and compliance capabilities. In a blog post, BitGo emphasized it was bringing continuity and stability for Prime Trust customers. At the same time, the acquisition of Prime Trust will make BitGo the first global digital asset firm to offer the full stack of solutions for Fintechs and institutions.

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Additional records also highlight the company’s aggressive spending patterns in the latter part of 2022. Specifically, October and November reported steep net losses of $7.4 million and $8.4 million, in that order. The precise implications of these outflows are still being examined, but the interplay between the company’s financial choices and market variances undeniably influenced its present financial state. Lawsuits from the SEC against Binance affiliates, as well as Coinbase, have ratcheted up retail and institutional trader concerns over storing crypto assets on a centralized exchange. “The combination of Prime Trust and BitGo would be a significant enhancement for the industry,” Prime Trust’s interim chief executive officer and president, Jor Law, said in the announcement.

• The acquisition announcement did not address or confirm rumors that Prime Trust is facing insolvency, which has been the center of speculation on Bitcoin Twitter.
• The company at the time said it faced a shortfall of customer funds, which had evidently started earlier in the year, without publicly specifying the cause of the discrepancy.
• The unfolding scenario underscores the volatile nature of the cryptocurrency realm and the inherent risks businesses face when navigating this digital frontier.
• BitGo Holdings, Inc., has announced its intention to acquire Prime Core Technologies, Inc., the parent company of Prime Trust.
• Five Minute Finance has influenced how I see finance – I rely on it for insight on the latest news and trends at the intersection of finance and technology.

The company revealed it incurred losses of $6 million in client funds and $2 million in treasury funds through USTC investments under previous management. On December 21, 2023, the Bankruptcy Court confirmed the Debtors’ chapter 11 plan (the “Plan”). The Plan provides for an orderly liquidation of the Debtors’ assets by the Plan Administrator. Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad. The improper effort in accessing “wallet access devices” devolved into a number of employees tapping fiat currency from customer what is the difference between ripple xrp and other cryptocurrencies 2020 accounts, then using those funds to purchase ether to fulfill customer withdrawals, Law said.

Just recently, bitcoin-only exchanges Strike and Swan both announced that they would be moving away from custody through Prime Trust. Strike announced that it will be utilizing its own custody services, while Swan is moving to Fortress Trust and BitGo, Fortress Trust being founded by the former founder of Prime Trust, Scott Purcell. The acquisition announcement did not address or confirm rumors that Prime Trust is facing insolvency, which has been the center of speculation on Bitcoin Twitter. This bankruptcy case information is sourced from PACER (Public Access to Court Electronic Records), the official electronic records system for U.S. federal courts. Our research analysts regularly monitor court filings to provide accessible summaries and track important developments. Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized.

Case Information and Court Record Details

Prime Trust had been the subject of some speculation with people online suggesting the firm was facing bankruptcy. Cryptocurrency custody firm BitGo has reached a preliminary agreement to buy Prime Trust, another crypto custody specialist regulated in the state of Nevada, according to two people familiar with the matter. This bankruptcy case information is provided for informational purposes only and does not constitute legal advice. All data is sourced from PACER (Public Access to Court Electronic Records) and other pundi x price today npxs live marketcap chart and info official federal court systems.

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In a statement, Prime Trust Interim CEO Jor Law called the move “a significant enhancement for the industry.” Five Minute Finance has influenced how I see finance – I rely on it for insight on the latest news and trends at the intersection of finance and technology. BitGo did not reveal the terms of the agreement beyond it being an equity purchase. The loss was disclosed in an Aug. 24 filing with the Bankruptcy Court for the District of Delaware in the United States.

• Prime Trust said in its statement it believes Chapter 11 bankruptcy will provide a “transparent and value-maximizing process” for the benefit of its clients and stakeholders.
• Prime Core Technologies, parent of Prime Trust, experienced an $8 million financial setback due to investments in TerraUSD, a stablecoin, leading to bankruptcy proceedings in August 2023, highlighting the cryptocurrency market’s volatility.
• The Plan contemplates that the Plan Administrator will establish this Wind-Down Website to provide certain information to customers, other creditors, and other parties in interest regarding the liquidation of the Debtors’ assets.
• But the news of late has not been good, with the firm shedding a third of its workforce at the end of January this year and announcing it would cease operations in Texas where the firm was pursuing a money transmitter license.
• The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more.

Prime Trust did not respond to requests for comment, though the Wall Street Journal reported that a representative confirmed the sale to it. In its press release, BitGo highlighted three key expected benefits of its likely acquisition of Prime Core Technologies. First, it is simply viewing the addition as the next expansion of its already-significant network of regulated trust companies.

BitGo Enters Non-Binding Agreement to Acquire Crypto Custodian Prime Trust

It’s the latest in a string of bankruptcy filings born out of last year’s collapse in digital asset valuations — the result of an industry-wide contagion, first initiated by the demise of Terra’s ecosystem in May 2022. The bankruptcy is a major setback for Prime Trust, which was once one of the leading financial technology companies in the digital asset space. The company had previously raised over $100 million in funding a year ago from investors such as Kraken Ventures, Mercato Partners and Fin Capital. The digital-asset firm BitGo Holdings Inc. said it agreed to acquire the parent company of Prime Trust, the crypto custodian for the beleaguered Binance.US trading platform. BitGo CEO Mike Belshe said the move would position the firm “to enhance its best-in-class, trusted solutions and to service the combined customer base.”

In a motion on Thursday, Prime Core’s interim chief executive pointed to a number of instances of improprieties within the company in voicing support for its Chapter 11 bankruptcy proceedings. Three of its affiliated companies have been listed as debtors, including Prime Core Technologies, Prime IRA and Prime Digital, according to Stretto. An attempt to raise millions of dollars in emergency fundraising was made earlier in June, but the company was ultimately unable to secure necessary funding. The shortfall was reportedly caused by Prime Trust’s shrinking customer assets, according to a separate June filing.

The bankruptcy petition for PRIME CORE TECHNOLOGIES INC. showed assets in the range of $50MM – $100MM with liabilities in the range of $100MM – $500MM. PRIME CORE TECHNOLOGIES INC. reports that the number of creditors is in the range of 25, ,000. AI-powered legal analytics, workflow tools and premium legal & business news. Welcome to your premier source for the latest in AI, cryptocurrency, blockchain, and AI search tools—driving tomorrow’s innovations how to sell your bitcoin from wallet exodus buy bitcoin to transfer today.

We help clients develop and execute strategies that create positive impact within an organization by maximizing productivity and increasing their capabilities. Even so, the company said it is seeking to emerge from Chapter 11 as a going concern and is open to all strategic options, including a sale of the company, according to a statement. Nevada’s Department’s Financial Institutions Division ultimately ordered Prime Trust to cease operations that month, citing concerns over its financial health and its inability to honor withdrawal requests. Palo Alto, California-based BitGo said in a statement that it signed a non-binding term sheet to acquire 100% of the equity of Prime Core Technologies Inc.

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Get crypto market analysis and curated news delivered right to your inbox every week. The filing attributed its investment losses and increased expenditures in October and November 2022 as key factors leading to its bankruptcy declaration. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions.