Prime Trust said to be scrambling for emergency cash package
The company is looking to raise $25 million by this weekend, sources said
Crypto custodian Prime Trust has been angling with increasing urgency to raise millions of dollars in emergency fundraising, according to two sources familiar with the matter.
Prime Trust has engaged in talks with a number of potential financiers, sources said.
The company may need that money by the beginning of next week, if not earlier, both sources said. The firm offers a range of crypto financial services, including spot custody, as well as support for crypto on- and off-ramps to fiat.
Wide ranging solutions to the company’s apparent steep cash flow shortage appeared to be on the table. Prime Trust executives are said to have floated $25 million as one amount that would stabilize the US firm’s balance sheet.
What caused the shortfall was not immediately clear on Thursday, though both sources pointed to Prime Trust’s shrinking customer assets.
Reports that BitGo may be interested in acquiring the company were unconfirmed at the time of writing.
Spokespeople for Prime Trust did not immediately return requests for comment.
The SEC’s back-to-back lawsuits against Binance affiliates, as well as Coinbase, have amped up retail and institutional trader anxiety around keeping crypto assets on exchanges.
The emergency financing package has been designed to prevent Prime Trust from entering “receivership,” according to one source with direct knowledge of the matter. That could suggest the crypto company’s finances are in dire shape — and that its executives aren’t confident in Prime Trust’s ability to dig itself out of its monetary hole.
“We know that Prime Trust has had issues in the past,” one source said. “They’ve losses on their balance sheet…but they’re now exposed.”
After the closure of Signature Bank, which transpired amid a wave of US bank closures earlier this year, Prime Trust became more integral to the operations of a number of top crypto companies.
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