Crypto custodian BitGo has signed a letter of intent to acquire Prime Trust, a financial infrastructure provider and custodian for the crypto industry.

The news of the acquisition was first reported by CoinDesk and then confirmed by BitGo in a blog post on Thursday.

BitGo said it had signed a non-binding term sheet to acquire 100% of Prime Core Technologies, which is the parent company of Prime Trust. The deal will still require regulatory approval.

“This is a landmark transaction, leading a greater shift in the digital asset landscape toward a more secure and sustainable future,” said Mike Belshe, CEO and cofounder of BitGo, in the release. “With the expected acquisition of Prime Trust, BitGo is well positioned to enhance its best-in-class, trusted solutions and to service the combined customer base.”

BitGo first entered the crypto market in 2013 offering crypto wallet solutions and has since expanded into institutional custody, staking and trading. It is backed by Goldman Sachs, Galaxy Digital Ventures, DRW and Digital Currency Group, among others.

Nevada-based Prime Trust offers custody solutions alongside financial infrastructure tools for the crypto industry. There’s been some speculation about the financial position of Prime Trust as its clients included collapsed crypto companies FTX and Celsius. Binance.US, which was the subject of a lawsuit from the Securities and Exchange Commission (SEC) this week, is also said to be storing customer assets with Prime Trust’s network of banking partners.

Earlier today, Blockworks reported that Prime Trust was scrambling for an emergency cash package to prevent the firm from entering receivership, citing sources familiar with the matter.

Prime Trust raised $107 million in June last year in a Series B funding round but has recently faced headwinds as the crypto bear market started to bite. It laid off a third of its staff in May, replaced its CEO Tom Pageler with interim CEO Jor Law following the collapse of FTX in November and shuttered operations in Texas.

​​“The combination of Prime Trust and BitGo would be a significant enhancement for the industry,” Law said in the release.

BitGo intends to integrate Prime Trust into its global network of trust companies and use “its API infrastructure and exchange network to reinforce BitGo Wallet Services (BWS) and BitGo’s Go Network.” The company said it would also be able to tap Prime Trust’s existing network of banking partners and payment rails.

“No other company will have the breadth of product and services nor depth of experience that this combined company would have,” added Prime Trust’s Law.

BitGo itself was in the process of being acquired by Galaxy Digital but the crypto investment firm decided to terminate the acquisition in August last year due to the crypto custodian’s failure to deliver audited financial statements that complied with the acquisition agreement.