Prime Trust Put Into Receivership Amid Shortfall in Funds, Charges It Misused Customer Money
Crypto custodian Prime Trust has been ordered by the Nevada court to be put into receivership, following accusations of using customer funds to meet withdrawal requests and a shortfall in customer funds.
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The company's overall financial condition has significantly deteriorated, leaving it in an "unsafe or unsound condition to transact business." The operations will be taken over by John Guedry, the president of Bank of Nevada. The Nevada regulator filed to take over the company in June, freezing all its businesses after alleging near insolvency. Prime Trust owes its clients over $85 million in fiat, with only $3 million in fiat currency on hand, and owes $69.5 million in crypto to customers, holding $68.6 million in crypto on hand. The filing also accuses the company of using customer account funds to fulfill withdrawals from its "legacy wallets."
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