U.S. crypto asset custody company Prime Trust “insufficient customer funds”: Nevada regulator | CoinDesk JAPAN

Crypto custody firm Prime Trust has been unable to meet all withdrawal requests this month due to a “lack of client funds,” Nevada regulators said Wednesday.

Nevada regulators have ordered Prime Trust to cease all activity that violates state regulations, saying the company’s “overall financial condition… has deteriorated significantly to critically deficient levels.”

Prime Trust is in “significant loss” and may become insolvent, he said.

“Around June 21, 2023, Prime Trust was short of funds and unable to meet customer withdrawals due to large amounts of debt to customers recorded on its balance sheet.” We are unable to protect our assets in custody and are unable to meet all customer withdrawals.” (Nevada Regulatory Order)

Nevada regulators said Prime Trust may not be able to continue to operate in good health, the regulator said, adding that it had breached its fiduciary duties.

The regulator’s order was announced on the Nevada regulator’s website just hours after fellow crypto custody firm BitGo announced it was canceling its acquisition of Prime Trust.

Jor Law, Interim CEO of Prime Trust, did not respond to a request for comment as of this writing.

“Nevada regulators have been actively monitoring Prime Trust’s solvency in anticipation of possible acquisitions and mergers.” Prime Trust has violated the trust laws of Nevada and its fiduciary duty to its clients.The primary purpose of the agency is to serve the interests of Prime Trust clients. to preserve the company’s remaining corporate value,” said a spokesperson for the Nevada regulator.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
| Image: Prime Trust
｜Original: Prime Trust Has ‘Shortfall of Customer Funds,’ Nevada Regulator Says