Prime Trust placed in receivership by Nevada regulator

The Nevada Financial Institutions Division filed a court petition to place Prime Trust (a provider of financial infrastructure for fintech and crypto firms) into receivership due to operating in an “unsafe and unsound manner”.

Prime Trust was once a leading participant in the digital asset space, with funding from fallen giants such as FTX and Celsius Network.

• The petition comes a week after the regulator Issued A moratorium has been ordered on Prime Trust, alleging that it has severe liquidity crunch and cannot honor customer withdrawals.
• as per latest AdmissionThe company owes customers more than $85 million in fiat currency, but only has $2.9 million on hand. Furthermore, it has crypto loans of $69.5 million, while its digital assets amount to $68.6 million.

“In view of the above, Prime is in a precarious financial position and/or is insolvent. Additionally, the position of PRIME will get progressively worse as customers keep moving away from PRIME,” alleged the agency.

• Receivership is a method that helps creditors recover their dues and can benefit troubled organizations to avoid filing for bankruptcy protection.
• It seems that problems with Prime Trust have caused BitGo to back out of the acquisition deal. The latter disclosed its intention to keep the troubled company under its umbrella but Stopped Such plans last week.

“After considerable effort and work to find a way forward with Prime Trust, BitGo has made the difficult decision to terminate its acquisition of Prime Trust. This decision was not taken lightly, and BitGo remains committed to our mission of providing trust in digital assets,” said BitGo.

The Nevada Financial Institutions Division filed a court petition to place Prime Trust (a provider of financial infrastructure for fintech and crypto firms) into receivership due to operating in an “unsafe and unsound manner”.

Prime Trust was once a leading participant in the digital asset space, with funding from fallen giants such as FTX and Celsius Network.

• The petition comes a week after the regulator Issued A moratorium has been ordered on Prime Trust, alleging that it has severe liquidity crunch and cannot honor customer withdrawals.
• as per latest AdmissionThe company owes customers more than $85 million in fiat currency, but only has $2.9 million on hand. Furthermore, it has crypto loans of $69.5 million, while its digital assets amount to $68.6 million.

“In view of the above, Prime is in a precarious financial position and/or is insolvent. Additionally, the position of PRIME will get progressively worse as customers keep moving away from PRIME,” alleged the agency.

• Receivership is a method that helps creditors recover their dues and can benefit troubled organizations to avoid filing for bankruptcy protection.
• It seems that problems with Prime Trust have caused BitGo to back out of the acquisition deal. The latter disclosed its intention to keep the troubled company under its umbrella but Stopped Such plans last week.

“After considerable effort and work to find a way forward with Prime Trust, BitGo has made the difficult decision to terminate its acquisition of Prime Trust. This decision was not taken lightly, and BitGo remains committed to our mission of providing trust in digital assets,” said BitGo.