Prime Trust Ordered into Receivership Amidst Financial Troubles
The Eighth Judicial District Court of Nevada has ordered crypto custodian Prime Trust to be put into receivership after the company was found to be in an “unsafe or unsound condition” to conduct business. The court’s decision comes after the state of Nevada ordered Prime Trust to cease all activities due to a shortfall in customer funds and allegations of using customer funds to meet withdrawal requests.
Key Points:
- Nevada’s Department of Business and Industry Financial Institutions Division has stated that Prime Trust’s overall financial condition has considerably deteriorated to a critically deficient level.
- John Guedry, president of Bank of Nevada, will take over the company’s operations.
- Prime Trust owed its clients over $85 million in fiat currency and $69.5 million in crypto.
- The company had only $3 million in fiat currency and $68.6 million in crypto on hand.
- The filing accused Prime Trust of using customer funds to satisfy withdrawal requests from its “legacy wallets.”
This order for receivership comes after BitGo terminated its acquisition of Prime Trust amidst the allegations of near insolvency. Prime Trust now faces the challenge of resolving its financial troubles and rebuilding trust with its customers.
Hot Take:
Prime Trust’s entry into receivership is a significant blow to its credibility as a crypto custodian. This case highlights the importance of financial stability and trust in the crypto industry. It serves as a reminder for crypto investors to carefully choose custodians that prioritize security and have solid financial foundations.
By
By
By
By
By
By