The parent company of Prime Trust, a crypto custodian in bankruptcy, announced that it lost $8 million in user and treasury funds through its investments in the crashed algorithmic stablecoin TerraUSD (UST).
Parent company Prime Core Technologies filed for Chapter 11 bankruptcy in the US in August, saying it had between $100 million and $500 million in debt and between $25,000 and 50,000 in creditors.
Prime Core Technologies reported that it had invested $6 million in client funds and $2 million in treasury funds “under previous management” with UST, according to an August 24 filing in the U.S. Bankruptcy Court for the District of Delaware.
But in May 2022, the UST suffered a major collapse, dropping to almost zero and the company losing millions of dollars in value. The filing blamed UST investment and an increase in spending in October and November 2022 as contributing factors to its bankruptcy.
“Although the cryptocurrency winter was not a sudden event that led to the appointment of trustees and these Chapter 11 Lawsuits, the company felt the volatility of the cryptocurrency winter, which resulted in lower revenues,” the filing said.
*Not investment advice.
