- Crypto custodian Prime Trust filed for bankruptcy yesterday, August 14.
- Nevada regulators say the events leading to the bankruptcy started in December 2021.
- Prime Trust provided essential assistance to crypto exchange Binance US.
Prime Trust, a company that facilitated banking access for the cryptocurrency industry and safeguarded its assets, has reportedly filed for bankruptcy protection due to a significant shortage in customer funds.
According to sources, the firm is contending with a range of 25,000 to 50,000 creditors. The company’s financial situation, outlined in a court filing cited by The Wall Street Journal, indicates assets valued between $50 million and $100 million, with liabilities ranging from $100 million to $500 million.
The bankruptcy filing comes in response to actions taken by a Nevada regulator, who, according to The Wall Street Journal, filed a petition in June to place Prime Trust under receivership due to a substantial deficit of around $83 million.
The shortfall, as noted by Nevada regulators and reported by The Wall Street Journal, is partially attributed to Prime Trust’s loss of access to certain crypto wallets containing customers’ digital assets in December 2021.
Despite these challenges, the company intends to explore several options, including the potential sale of its assets and operations. It is committed to maintaining employee wages and benefits, according to The Wall Street Journal.
Prime Trust emerged in 2018 as a crucial link between the fledgling and volatile crypto industry and traditional banking systems. Alongside safekeeping crypto assets, the firm assisted clients in depositing traditional currency with its network of banking partners.
Notably, Prime Trust provided essential assistance to crypto exchange Binance.US when the exchange encountered obstacles in securing a bank for customer funds.
