• Prime Trust, a crypto custodian, is allegedly insolvent and owes customers upwards of $156 million.
• Its acquisition by BitGo was terminated on June 22 and Nevada’s Financial Institutions Division (FID) ordered Prime Trust to cease all activities.
• Prime Trust allegedly owes its clients $85 million in fiat, and has about $3 million in fiat currency on hand as well as owing a further $69.5 million in crypto but only having $68.6 million in crypto on hand.
Prime Trust Allegedly Insolvent
Prime Trust, the allegedly insolvent crypto custodian that owes customers upwards of $156 million, is not helping the crypto industry’s shady mainstream reputation. On the morning of June 22, 2020 crypto custody giant BitGo terminated its acquisition of rival Prime Trust and Nevada’s Financial Institutions Division (FID) ordered the company to cease all activities alleging the company’s “overall financial condition had considerably deteriorated.” This past Wednesday Nevada’s FID filed to place Prime Trust into receivership.
Mt Gox & Quadriga
With Mt Gox , Quadriga and other times when crypto companies have entered mainstream awareness for losing millions of dollars of customer funds, we have years of evidence that custodying crypto is apparently quite difficult.
PrimeTrust Owes Customers Money
Prime Trust allegedly owes its clients $85 million in fiat, and has about $3 million in fiat currency on hand. The company also owes a further $69.5 million in crypto, and has $68.6 million in crypto on hand; creating a number mismatch which has caught eyes from many parties involved with the case thus far.
BitGo CEO Mike Belshe Addresses Termination Of Acquisition
BitGo CEO Mike Belshe joins “First Mover” to address why the custodian terminated its acquisition of rival Prime Trust after reaching a preliminary agreement to acquire the firm for an undisclosed amount as well as insights into BitGo’s Go Network and Belshe’s outlook on cryptocurrency regulation.
Conclusion
The case with PrimeTrust serves as yet another example that it is very difficult for companies to properly custody cryptocurrencies due to massive liabilities associated with them and potential mismanagement from within those companies themselves