Crypto Custodian Prime Trust halts withdrawals after BitGo terminates acquisition
- Prime Trust is suspending its crypto services after receiving notice from the Nevada regulator
- BitGo announced it would no longer acquire the crypto custodian
Another crypto entity is in the spotlight for being in troubled waters this year. Prime Trust, a crypto custodian, announced that it would be halting its withdrawals for both fiat and crypto.
Notably, the news comes in right when the crypto market has started to move in an upward trajectory, with Bitcoin [BTC] breaching the $30,000 mark on 20 June.
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State of affairs of the crypto custodian
Prime Trust’s move to disable withdrawal was influenced by the Nevada Financial Institution Division, a regulatory body governing Nevada’s financial institutions. On 21 June, the regulator ordered the crypto custodian to stop accepting deposits and halt withdrawals for crypto and fiat. Meanwhile, the firm will “suspend certain business expansion activities”.
This includes entering into new customer contracts. The press release read,
“Prime Trust is actively engaging the NV FID to determine next steps to remediate any concerns and return to business as usual as soon as possible. We sincerely apologize for this inconvenience and ask you to be patient with us while we work with the regulators to provide more clarification on the next steps.”
Moreover, the regulatory clampdown on the crypto entity put a halt on its other businesses as well. This includes crypto exchange – Stably services such as Stably Ramp, Stably Prime, Stably USD, and BTC/ ETH redemptions on Chia Network.
The platform had to take this step as Stably relies on Prime Trust for custody services. Most of Stably’s services are regulated and Stably Prime focuses on providing services to institutional customers.
Notably, the crypto entity did not provide a reason as to why the regulator ordered it to suspend its business operations. Details on when the services could possibly resume were also missing in its press release.
BitGo lets go of Prime Trust
Prior to the release of its statement, BitGo – a regulated crypto custodian – announced it would be dropping its plan to acquire Prime Trust. The announcement stated that the decision was “not made lightly”. It also added that it “remains committed to our mission to deliver trust in digital assets.”
BitGo first revealed its plans to acquire Prime Trust on 8 June 2023. The platform stated that it had reached a deal to fully acquire its parent company Prime Core Technologies and had entered into a non-binding contract. However, the deal fell through within days of signing the contract.