Prime Trust Files for Bankruptcy Following Cease-and-Desist Order by Nevada Regulators

Las Vegas cryptocurrency custodian, Prime Trust, has filed for Chapter 11 bankruptcy protection. The company has stated that it has 25,000 to 50,000 creditors and expects liabilities of $100 million to $500 million. Its estimated assets are valued at $50 million to $100 million. The company plans to file motions with the Bankruptcy Court to assess strategic options, including the potential sale of its assets. However, recent issues with Nevada Regulators and Creditors may complicate finding a buyer. John Guedry, ex-president of Bank of Nevada, will lead the restructuring overseen by Judge Susan Johnson.

– Prime Trust has filed for Chapter 11 bankruptcy protection with liabilities of $100 million to $500 million.
– The company plans to file motions to assess strategic options, including the potential sale of its assets.
– Recent issues with Nevada Regulators and Creditors may complicate finding a buyer.
– John Guedry will lead the restructuring overseen by Judge Susan Johnson.
– Prime Trust will operate as “debtors-in-possession” under the court during this process.

Prime Trust declared bankruptcy after receiving a cease-and-desist order from Nevada’s business regulator on June 21.

Nevada regulators issued a cease-and-desist order to shut down Prime Trust due to severe financial woes. The company owed over $85 million in fiat but had only $2.9 million. It also owed $69.5 million in cryptocurrencies but only had access to a little over $68.6 million. The order stated that the firm’s financial condition needed improvement, preventing it from fulfilling customer withdrawal requests. Prime Trust was placed into receivership in late June, preventing it from serving its customers.

– Nevada regulators issued a cease-and-desist order to shut down Prime Trust due to severe financial woes.
– The company had significant debts in both fiat and cryptocurrencies.
– Prime Trust was placed into receivership, preventing it from serving its customers.

Setbacks and regulatory actions resulted in the suspension of customer withdrawals.

Prime Trust faced a string of challenges, including bankruptcy filings by its subsidiary Banq and a cease-and-desist order for its partner Abra. Other cryptocurrency companies quickly withdrew their funds stored with Prime Trust following the cease-and-desist order. However, some firms still had customer funds trapped within the now-bankrupt custodian. The situation worsened when the Nevada Financial Institutions Division took action to close down Prime Trust, citing violations of fiduciary responsibilities and breach of trust laws.

– Prime Trust faced setbacks, including bankruptcy filings by its subsidiary Banq and a cease-and-desist order for its partner Abra.
– Other cryptocurrency companies quickly withdrew their funds stored with Prime Trust.
– Some firms still had customer funds trapped within the now-bankrupt custodian.
– The Nevada Financial Institutions Division closed down Prime Trust due to violations of fiduciary responsibilities and breach of trust laws.

Hot Take

The bankruptcy filing by Prime Trust is another blow to the troubled fintech company, which has faced severe financial woes and regulatory actions. The suspension of customer withdrawals and the potential sale of its assets further highlight the challenges the company is facing. This situation serves as a reminder of the importance of due diligence and trust in the cryptocurrency industry. Investors and customers should carefully consider the custodians and platforms they entrust their funds to, ensuring they prioritize transparency and financial stability.