Nevada Regulator Filed To Take Over Prime Trust Crisis Company

Key Points:

• The Nevada regulator that applied to take over the Prime Trust is facing default.
• The filing says Prime Trust is also running with an equity shortfall of $12 million due partly to an inability to access old wallets.
• The regulator said the crypto asset manager has failed and owes millions to its customers.

According to Coindesk, the Nevada Department of Financial Institutions (FDI) announced on Tuesday that it has applied to take over cryptocurrency custodian Prime Trust and freeze its activities.

FDI has petitioned the Nevada District Court to appoint a person to take over the day-to-day operations of the Prime Trust and “thoroughly examine all of the company’s financial affairs to determine what is in the best interest of the company.” Prime customers, or to remedy and return the company to private management, or liquidate it”.

An attachment to the application document shows that Prime’s management has agreed to take over. According to previous news, FDI stated that Prime Trust lost access to old wallets in early 2021 and used customer assets to buy back cryptocurrencies.

Prime Trust entered into an agreement with Fireblocks for a second company to manage its crypto assets. The deal was completed in 2020. In 2021, after Prime Trust had new management, it had already signed up. Set up “old wallet forwarding” for wallets on Fireblocks’ platform, or set up to forward to wallets on Fireblocks’ platform, the filing said.

However, in December 2021, Prime Trust “discovered that it could not access” the old wallets or the cryptocurrencies held in those wallets. Fireblocks head of communications Gaby Hui told CoinDesk that Prime and Fireblocks control all legacy wallets and hold no funds.

Prime Trust owes customers $85.67 million in fiat and $69.509 million in crypto but currently holds just $2,904 million in fiat and $68,648 million in crypto.

The Nevada Division of Financial Institutions said last week that the company could not accommodate all customer withdrawals. The notice said the company is operating in an unsafe condition and has been insolvent since June 21.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Foxy

Coincu News