From Cold Storage to Cold Reality: The Dramatic Decline of Prime Trust
– Prime Trust’s CEO, Jor Law, stated that lavish spending and depressed revenues during the “crypto winter” of 2022 led to the company’s insolvency.
– The company had $10.5 million in expenses and only $3.1 million in revenue in October 2022.
– Prime Trust lost $6 million in customer funds and $2 million of its own corporate treasury money by investing in the failed stablecoin terrausd.
– The main factor contributing to Prime Trust’s downfall was a “Wallet Event” where customers deposited cryptocurrency into an old cold storage wallet that became inaccessible without the physical keys.
– Prime Trust used $76 million in customer funds to purchase replacement crypto from December 2021 to March 2022.
Hot Take:
Prime Trust’s decline highlights the importance of responsible financial management in the crypto industry. The company’s failure to secure customer funds and comply with regulations led to its insolvency. This serves as a cautionary tale for other crypto companies to prioritize security and financial stability to avoid a similar fate.
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