The Nevada Financial Institutions Division has taken legal action against Prime Trust, a provider of financial infrastructure for fintech and crypto firms, by filing a court petition to place the company in receivership. This action follows a cease and desist order issued by the regulator, which claimed that Prime Trust had severe liquidity problems and was unable to fulfill customer withdrawals. The latest filing reveals that the firm owes over $85 million in fiat currency to clients but only has $2.9 million on hand. Additionally, it has $69.5 million in crypto debt and $68.6 million in digital asset holdings. The agency alleges that Prime Trust is in an unsafe financial condition and may become insolvent. Receivership is a method that can help creditors recover their sums and could potentially help distressed organizations avoid bankruptcy. BitGo, a company that had previously intended to acquire Prime Trust, has now decided to terminate the acquisition due to the troubled company’s financial problems.
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