The Prime Trust crypto depository arbitrarily disposed of clients' money
Date: 2023-06-29 Author: Karina Ziganova Categories: CRYPTO PAYMENTS
The authorities of the state of Nevada appealed to the US federal court with a request to appoint a manager for the Prime Trust crypto depository.
According to Bloomberg, they claim that the company used customers' money to buy cryptocurrencies after losing access to digital wallets with tens of millions of dollars. Now the local authorities want to achieve the confiscation of all Prime Trust assets, as well as documents and records of the company. They also ask that Prime, including its officers and agents, be banned from using any of the company's funds.
Prime Trust has lost access to wallets
In 2018, Prime Trust created a digital wallet to store cryptocurrency for its customers. After that, the depository used the Fireblocks digital asset platform to store all crypto assets, however, the original wallet was considered inactive.
The document states that around December 2021, Prime discovered that it was unable to access some of its wallets where the cryptocurrency was stored. However, it is unclear what exactly happened. As a result, from December 2021 to March 2022, the crypto depository bought the cryptocurrency using customers' money to cover losses.
"Prime is attempting to regain access to legacy wallets. However, at the time of filing this petition, Prime was unable to do so," the petition says.
Prime Trust owes millions
Now the company, which is a division of Prime Core Technologies Inc., owes its customers $85.67 million in fiat currency, having only $2.904 million in fiat. Another $69.5 million was owed to customers in view of digital assets. At the same time, Prime has only $68.65 million in cryptocurrency.
Due to multimillion-dollar debts, the Nevada authorities are being asked to appoint a manager who will take over the day-to-day operations of the company and check its finances to decide whether it should be liquidated or reorganized. They claim that Prime is an insolvent company.
BitGo changed its mind about saving a troubled crypto depository
Last week, cryptocurrency provider BitGo decided not to absorb troubled competitor Prime Trust. It is unclear whether BitGo was aware of the problems of the crypto depository - the company did not indicate the reason for the failure of the transaction.
Initially, BitGo's plans to buy out Prime Trust became known in early June. However, the deal was canceled just a week after Prime Trust's subsidiary, Banq, filed for bankruptcy in the United States.
