The Crypto Roundup: 23 June 2023 | CryptoCompare.com

The Nevada Department of Business and Industry revealed that Prime Trust, a crypto custody company, is facing significant shortfalls in customer funds, making it incapable of honoring all customer withdrawal requests this month.

The Financial Institutions Division (FID) of the Department, a body that supervises state-regulated trust companies has issued an order demanding that Prime Trust cease all activities breaching Nevada regulations.

The company’s overall financial health, according to the FID, has “deteriorated to a crucially deficient level,” with the company now “operating at a substantial deficit.” The firm, according to FID, was unable to honor customer withdrawals over a “significant liability” on its balance sheet.

The order further says Prime Trust “failed to safeguard assets under its custody and is unable to meet all customer withdrawals.”

The FID expressed concerns about Prime Trust’s ability to operate effectively and voiced allegations of the company failing its fiduciary duties. According to the order, Prime Trust had a negative stockholders’ equity position exceeding $12 million at the close of March 2023.

Hours after BitGo, another cryptocurrency company, announced the termination of its planned acquisition of Prime Trust, the order was published on the Nevada regulator’s website.

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• Source: https://www.cryptocompare.com/email-updates/daily/2023/jun/23/