Following the recent decision to abandon the proposed acquisition of the Prime Trust, BitGo CEO Mike Belshe revealed that the cryptocurrency custodian has several other investments in the pipeline.
In an interview with First mover on MondayBelshi said:
We have acquisitions pending that I can’t announce at this time, but I expect consolidation to happen in this space over the next six months.
BitGo: Termination and Financial Troubles Surrounding the Prime Trust
The termination of BitGo’s acquisition of Prime Trust on June 22 sparked speculation about the target company’s financial problems. This decision comes after reaching a preliminary agreement earlier this month.
In a tweet on Thursday, BitGo stated that it has gone to great lengths and is working to explore a way forward with Prime Trust. However, they abandoned the acquisition, stressing that their commitment to building trust in digital assets remains “unwavering.”
Prime Trust has faced a series of challenges in recent months. In November, the company replaced its CEO, Tom Bagler.
Then, in January, it faced workforce cuts, laying off nearly a third of its staff, and ceased operations in Texas. Just last week, his bank’s bank filed for bankruptcy.
According to a source from one of its former clients, Prime Trust has been losing customers and deposits to competitors for several weeks as concerns about the company’s business continue to mount.
The Nevada Division of Financial Institutions (FID) later confirmed that Prime Trust experienced a shortage of customer funds, which resulted in it being unable to process all withdrawal requests this month.
BitGo was previously on the verge of being acquired by Galaxy Digital (GLXY), a crypto-dealer 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 spin-off offers but is focused on expanding its business rather than being acquired by a major player in the industry.
Coinbase as a potential frontrunner in the custody sector
Coinbase (COIN) could be a potential claimant in the custodial sector. It has been selected by BlackRock (BLK) to be the custodian for the iShares Money Management Unit proposed bitcoin exchange fund (ETF).
Coinbase is a public company with a strong financial position, so it has the advantage as a first mover.
However, he noted that Coinbase may face the challenge of separating the custodial service from its business in the future.
Belshe also mentioned that BitGo is actively involved in discussions with various entities in the industry, confirming that he is in direct contact with BlackRock CEO Larry Fink. This indicates BitGo’s participation in negotiations with major players across the market.
Featured image from Twitter, chart from TradingView.com