Nevada regulator claims Prime Trust owes customers $85.7M in fiat alone

Prime Trust was only $861,000 short of paying back its outstanding crypto-based obligations to clients


Gorodenkoff/Shutterstock modified by Blockworks


Nevada’s Financial Institutions Division moved to place Prime Trust into receivership, a designation of insolvency. 

The crypto company sought receivership from the state’s enforcement agency after it received a cease-and-desist order from the regulator on June 21. 

In a Tuesday court filing, the state agency asked the court to impound the assets and related property of Prime Trust immediately. It also moved to enjoin Prime’s employees from removing Prime property without the permission of the court-mandated receiver. 

Prime Trust, per the Monday filing, was only $861,000 short of paying back its outstanding crypto-based obligations to clients. But the company’s outstanding fiat obligations were said to be far steeper: $85,670,000 owed — with just $2,904,000 of fiat reserves on its balance sheet. 

The latter discrepancy, per the filing, amounts to an $82,766,000 hole. 

Prime Trust allegedly “[purchased] additional digital currency using customer money from its omnibus accounts” from December 2021 to March 2022 after Prime “discovered that it was unable to access the Legacy Wallets and the cryptocurrency within.”

Prime Trust received the cease-and-desist after BitGo confirmed that it was backing out of its signed letter of intent to acquire the business. 

“The overall financial condition of Respondent has considerably deteriorated to a critically deficient level, and Respondent is now in a position where it is in an unsafe or unsound condition to transact business and/or if it were to continue to operate it would be in an unviable and/or unsafe manner,” the FID said in its June 21 filing. 

The cease-and-desist confirmed that the company, on the same day the filing was made public, was unable to “honor customer withdrawals due to a shortfall of customer funds caused by a significant liability on the Respondent’s balance sheet owed to customers.”

Loading Tweet..

BitGo and Prime Trist had originally announced the letter of intent after Blockworks reported that Prime Trust was looking to raise $25 million in a weekend.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png


With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.


Launching cryptocurrencies the old fashioned way may soon make a return


Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug


NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.


EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down