The Nevada Division of Financial Institutions (FID) has filed a petition with the court to transfer Prime Trust, a crypto custodian and financial services provider, to the trustee. FID claims that Prime Trust has lost access to some cryptocurrency wallets and used client funds to cover losses.
According to the petition, Prime Trust lost access to its old wallets in 2021. FID alleges that Prime Trust then used client assets to buy back crypto from the market without disclosing the matter to clients or regulators.
The petition states that Prime Trust owes its clients $85,670,000 in fiat money, but only has $2,904,000 in bank accounts. As for the digital currency, Prime Trust owes its clients $69,509,000, but only has $68,648,000 in their wallet.
“The petition requires the court to appoint a trustee to take over the day-to-day operations of the company and to comprehensively analyze its entire financial situation to determine the best option to protect Prime's customers, either by rehabilitating the company and returning it to private management, or by liquidating the company,” a Nevada FID spokesperson said in a press release. requests it to be examined in this way,” it said.
*Not investment advice.