BitGo Still Sees Consolidation in Crypto Custody After Spurning Prime Trust: CEO

CEO Mike Belshe said the firm has other acquisitions pending.

AccessTimeIconJun 26, 2023 at 1:23 p.m. UTC
Updated Jun 26, 2023 at 3:27 p.m. UTC
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Days after abandoning its proposed purchase of Prime Trust, BitGo CEO Mike Belshe said the cryptocurrency custodian has more acquisitions in the pipeline and expects further consolidation in the industry in the second half of the year.

"We've got [other acquisitions] pending," Belshe told CoinDesk TV's First Mover on Monday. "I haven't been able to announce them yet, but I think there's going to be consolidation in the space over the next six months."

BitGo terminated the acquisition of Prime Trust on June 22 amid speculation of the target's bankruptcy. Nevada's Financial Institutions Division (FID) subsequently said Prime Trust had "a shortfall in customer funds" and was unable to meet all withdrawal requests this month.

Palo Alto, California-based BitGo was itself almost bought by Mike Novogratz's crypto merchant bank Galaxy Digital (GLXY), until the $1.2 billion deal was canceled in August. Belshe said since Galaxy walked away, other offers have come "from time to time," but BitGo is now more focused in growing its business rather than being acquired by a major player.

One possible suitor in the custody sector is crypto exchange Coinbase (COIN), which was selected by BlackRock (BLK) as the custodian for its fund-management unit iShares' proposed bitcoin exchange-traded fund (ETF).

"Coinbase is a public company and it's got a very healthy balance sheet, so they do get some of those first movers," Belshe said. Coinbase, however, may at some point be required to separate its custody service from its trading business.

"These are not custodians, these are exchanges. Coinbase is going to have to choose which side of the fence they want to be on," he said.

Belshe added that BlackRock CEO Larry Fink has his phone number and that BitGo is "talking to pretty much every big deal that's out there."

Edited by Sheldon Reback.

CORRECTION (June 26, 14:22 UTC): Corrects date of canceled Prime Trust purchase; adds background of Galaxy's canceled purchase of BitGo and detail from interview about Coinbase and BlackRock


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Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

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