Prime Trust Put Into Receivership Amid Shortfall in Funds, Charges It Used Customer Money to Buy Crypto

Crypto custodian Prime Trust has been ordered by the Eighth Judicial District Court of Nevada, wherever the institution has its headquarters, to beryllium enactment into receivership aft the authorities ordered the institution to cease each activities amid a shortfall successful lawsuit funds and accusations that it utilized lawsuit funds to conscionable withdrawal requests.

According to the filing with Nevada’s Department of Business and Industry Financial Institutions Division, Prime Trust’s wide fiscal information has been “considerably deteriorated to a critically deficient level” which leaves the institution successful an “unsafe oregon unsound information to transact business.”

The company’s operations volition beryllium taken implicit by John Guedry, president of Bank of Nevada, the filing stated.

The Nevada regulator announced successful June that it had filed to instrumentality implicit the institution and frost each of its businesses aft it alleged Prime Trust of adjacent insolvency. The bid came hours aft chap crypto custodian BitGo terminated its acquisition of the company.

The request for receivership stated that Prime Trust owed its clients northbound of $85 cardinal successful fiat, and lone had astir $3 cardinal successful fiat currency connected hand. The institution owed a further $69.5 cardinal successful crypto to customers, and had $68.6 cardinal successful crypto connected hand, the filing said.

The filing besides accused Prime Trust of utilizing wealth from its lawsuit accounts to fulfill requests for withdrawals from its “legacy wallets.”