Prime Trust’s financial condition is “critically deficient” and it has been unable to honor customer withdrawals since June 21, according to Nevada’s business regulator.
In a order In the June 21 cease and desist order, the Nevada Department of Trade and Industry stated that Prime Trust’s financial condition has “substantially deteriorated” and the company is now in an “uncertain or unsafe condition” to continue operating:
“On or about June 21, 2023, Defendant [Prime Trust] was unable to honor customer withdrawals due to a shortfall in funds caused by a significant liability on defendant’s balance owed to customers.”
The order added that Prime Trust has “materially and willfully breached its fiduciary duties to its clients by failing to safeguard the assets in its custody.” The regulator again alleged that the firm is “unable to meet all customer disbursement requests.”
Prime Trust has 30 days to respond to the cease and desist order; You can request an administrative hearing to challenge it.
If Prime Trust does not contest it, the cease and desist order will be considered final.
On June 13, Prime Trust’s payments affiliate, Banq, filed for bankruptcy in the United States.
Since then, Wallet infrastructure provider and digital asset custodian BitGo confirmed on June 22 that it had decided to cancel its acquisition of Prime Trust.
After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust. This decision was not made lightly and BitGo remains committed to our mission to deliver trust in digital assets.
—BitGo (@BitGo) June 22, 2023
Cointelegraph reached out to Prime Trust for comment but did not receive an immediate response.
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