Prime Trust is the latest cryptocurrency custody platform to be in trouble, receiving a cease and desist order from the Nevada Department of Business and Industry over a “lack of client funds” and its inability to handle client withdrawal requests.
The regulatory order was made public Thursday, hours after BitGo, another digital asset custodian, ended its deal to acquire Prime Trust. Although a spokesperson for the Nevada state regulator confirmed to the media that the order was issued on June 21.
According to the Nevada Division of Financial Institutions (FID), Prime Trust’s “general financial condition … has deteriorated substantially to a dangerously weak level,” and, accordingly, the company was ordered to cease all activities. The regulator also highlighted that the cryptocurrency custodian may be on the verge of liquidation.
“On or about June 21, 2023, Defendant was unable to honor customers’ withdrawals due to a lack of customer funds caused by a large obligation on Defendant’s balance sheet owed to customers,” the regulatory order said. “In addition, the defendant failed to protect the assets in its custody and is unable to meet all of the clients’ withdrawals.”
TrueUSD printed 1 billion stablecoins out of nowhere, just days before Prime Trusts suspended services.
In March of 2017, Tether also lost access to banking services and suspiciously began printing billions in irredeemable Tethers.
TrueUSD is now… pic.twitter.com/BZoLn7Z8LV
– Bitfinex’ed 🔥🐧 Cassandra 🏺 (Bitfinexed) June 23, 2023
suspended deposits
Several companies confirmed that the Prime Trust had indeed stopped all deposits of fiat assets and cryptocurrencies on Thursday.
The regulatory order additionally highlighted that Prime Trust had more than $12 million in equity position at the end of March 2023, which indicates that the company is “operating at significant deficit.”
The Prime Trust is based in Nevada and has been struggling in business for a while now. She left providing the service in Texas in January after previously withdrawing her application for a Texas Money Transmitter (MTL) license, finance poles recently highlighted. Moreover, Banq, a mobile software solutions provider and subsidiary of Prime Trust, filed for bankruptcy last week in a US court in Nevada, declaring $17.72 million in assets and $5.4 million in liabilities.
Prime Trust is the latest cryptocurrency custody platform to be in trouble, receiving a cease and desist order from the Nevada Department of Business and Industry over a “lack of client funds” and its inability to handle client withdrawal requests.
The regulatory order was made public Thursday, hours after BitGo, another digital asset custodian, ended its deal to acquire Prime Trust. Although a spokesperson for the Nevada state regulator confirmed to the media that the order was issued on June 21.
According to the Nevada Division of Financial Institutions (FID), Prime Trust’s “general financial condition … has deteriorated substantially to a dangerously weak level,” and, accordingly, the company was ordered to cease all activities. The regulator also highlighted that the cryptocurrency custodian may be on the verge of liquidation.
“On or about June 21, 2023, Defendant was unable to honor customers’ withdrawals due to a lack of customer funds caused by a large obligation on Defendant’s balance sheet owed to customers,” the regulatory order said. “In addition, the defendant failed to protect the assets in its custody and is unable to meet all of the clients’ withdrawals.”
TrueUSD printed 1 billion stablecoins out of nowhere, just days before Prime Trusts suspended services.
In March of 2017, Tether also lost access to banking services and suspiciously began printing billions in irredeemable Tethers.
TrueUSD is now… pic.twitter.com/BZoLn7Z8LV
– Bitfinex’ed 🔥🐧 Cassandra 🏺 (Bitfinexed) June 23, 2023
suspended deposits
Several companies confirmed that the Prime Trust had indeed stopped all deposits of fiat assets and cryptocurrencies on Thursday.
The regulatory order additionally highlighted that Prime Trust had more than $12 million in equity position at the end of March 2023, which indicates that the company is “operating at significant deficit.”
The Prime Trust is based in Nevada and has been struggling in business for a while now. She left providing the service in Texas in January after previously withdrawing her application for a Texas Money Transmitter (MTL) license, finance poles recently highlighted. Moreover, Banq, a mobile software solutions provider and subsidiary of Prime Trust, filed for bankruptcy last week in a US court in Nevada, declaring $17.72 million in assets and $5.4 million in liabilities.