Nevada courts have ordered Prime Trust, a prominent crypto custodian now facing financial troubles, into temporary receivership on July 18.
Prime Trust, a once-thriving custody company for digital assets, has been formally declared under receivership by Nevada authorities. Companies that are bankrupt or almost insolvent are placed in receivership mode to allow for the organization’s smooth operation by a designated party and the realization of its assets for debt repayment.
The receiver for the Prime Trust has been named John Guedry. Prime Trust filed a petition for receivership with the Nevada Financial Institutions Division (FID) in June, alleging operational instability and insolvency risks. Prime Trust has been placed under receivership by the court pending an August hearing.
Prime Trust’s Issues
According to reports, Prime Trust’s problems started in late 2021 when the business lost access to some cryptocurrency wallets. The company once provided fiat and cryptocurrency custody services to firms, including the defunct FTX and Celsius Network, as well as others.
The FID also issued a cease-and-desist order against Prime Trust last month, alleging a substantial shortfall in client funds. Leading cryptocurrency custody provider, BitGo withdrew last month from its acquisition agreement with Prime Trust.
On June 22, BitGo reported that the purchase had been canceled. However, the corporation did not provide a specific justification for such a choice.
