Prime Trust Cryptocurrency Custodian Files for Bankruptcy
Cryptocurrency custodian fintech Prime Trust has filed for bankruptcy under Chapter 11 in the US. The company is facing insolvency issues and is unable to work with its customers. Here are the key points:
– Prime Trust filed for bankruptcy in the Eighth Judicial District Court of Nevada.
– John Guedry, former president of the Bank of Nevada, has been chosen as the receiver to supervise the company’s operations.
– BitGo had shown interest in acquiring Prime Trust but later decided against it.
– Nevada regulators found that Prime Trust had over $12 million in negative stock and had been using customers’ money to pay withdrawals.
– The company currently operates under the “state of debtors-in-possession” under the supervision of the bankruptcy court.
Prime Trust was founded in Nevada in 2016 and provides fintech and digital asset infrastructure. The bankruptcy process will give the company a chance to explore different options, including selling its assets.
Hot Take: Cryptocurrency Custodian Prime Trust Faces Bankruptcy
Prime Trust’s bankruptcy filing reflects the challenges faced by cryptocurrency custodians in a volatile market. The mismanagement of funds and insolvency issues highlight the importance of regulatory oversight and due diligence in the crypto industry. This development serves as a cautionary tale for investors and emphasizes the need for trustworthy and transparent custodial services in the cryptocurrency space.
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