In the court petition the regulator claims Prime Trust has faced significant technological and financial problems. In particular, Prime Trust does not have sufficient funds to reimburse customer deposits and has lost access to digital wallet assets placed with a third-party custodian.
Prime Trust owed its customers more than $85 million in fiat currency and at least $69 million in digital assets, according to preliminary regulatory filings.
Prime Trust’s board of directors acknowledged insurmountable problems in the company’s operational organization and agreed to put it into receivership, according to the court filing attachment.
Prime Trust’s need for outside administration stemmed from its failed merger with custodial services provider BitGo. At the time of the deal’s termination, BitGo CEO Mike Belshe said that after due diligence, it was clear that Prime Trust investors had unreasonably high expectations and lacked the necessary funding.