- Prime Trust owes its customers about $85 million in fiat
- Another $69.5 million the company owes in cryptocurrency
The Nevada Division of Financial Institutions has filed suit to take over and freeze businesses of cryptocurrency custodian Prime Trust. The regulator claims the company did not have the funds to cover customer deposits and lost access to some wallets.
According to a published petition for receivership, Prime Trust owed its customers about $85 million in fiat currencies and has only $3 million on hand.. The company has $69.5 million in cryptocurrency debt, with $68.6 million on its balance sheet. The filing writes that Prime Trust is operating with a $12 million equity deficit.
From December 2021 through March 2022, Prime Trust purchased additional digital currency using client funds to ensure withdrawals from inaccessible legacy wallets, according to the filing. The company tried to restore access to Legacy Wallets, but was unable to do so at the time the motion was filed.
In addition, the lawsuit specifies a request to appoint a receiver to take over the daily operations of the company and analyze its financial condition in detail to identify the best option to protect customers.. That option could include rehabilitating the company and returning it to private management, or liquidating it.
The application also requires the court to enjoin Prime Trust, as well as its officers, directors, shareholders and others, from disposing of any company assets or entering into any transactions.