Cryptocurrency company Prime Trust has been taken over by Nevada state regulators.
The following statements were used in the official statement:
“The Nevada Eighth Judicial District Court has ordered Prime Trust LLC to be appointed a temporary trustee pending hearing in August.”
Prime Trust owes its clients more than $80 million in cash, according to court filings.
According to a July 14 filing in the Eighth Judicial District Court in Nevada, the judge said, “After reviewing the points and authorities with relevant exhibits submitted in support of the Petition, including the consent of the Defendant, the Court has found good reason to grant the Petition.”
According to the file, the judge later ordered Prime to appear in court on August 22 to show why the state regulator's petition should not be permanently accepted.
On June 8, 2023, BitGo, a crypto custodian that has acquired other companies in the past, started the process of acquiring another custodian, Prime Trust.
On June 22, two weeks later, BitGo withdrew from this deal. On the same day, rumors emerged that the state of Nevada had filed a reprimand against the Prime Trust, which the state later confirmed by issuing an order alleging that there was a massive shortage of client funds and that it may indeed have gone bankrupt.
Four days later, the state of Nevada took things a step further, applying for a trusteeship (essentially seeking court approval to take over the company). With the latest development, the court approved this application for trusteeship.
*Not investment advice.