Nevada courts placed Prime Trust, a prominent crypto custodian now in financial trouble, in temporary receivership on July 18, officials confirmed. Nevada’s Eighth Judicial District Court has approved a petition from the Nevada Financial Institutions Division (NFID) that Prime Trust will be temporarily placed in receivership.
John Guedry, formerly an executive at the Bank of Nevada and other financial institutions, has been appointed trustee pending a permanent court order. Guedry will oversee Prime’s day-to-day operations; he will also conduct a full investigation into the company’s finances and find the best way to protect Prime Trust’s customers.
The NFID said it cannot provide legal advice or advice to Prime’s customers and advised Prime Trust customers to contact John Guedry directly.
Guedry’s tutelage will last at least until a hearing on the show’s cause on August 22, 2023. That hearing could otherwise affect Prime Trust’s ability to operate.
The Prime Trust crisis started almost a month ago
The NFID initially issued a cease and desist order to Prime Trust on June 21, at which point it said the company was unable to meet customer withdrawal requests. It also ordered the company not to accept any more money at that point.
The NFID then filed a petition to place Prime Trust in receivership on June 26 due to concerns about insolvency and the company’s apparent failure to maintain a safe and regulated operating environment as mandated by NRS 669. That petition came with permission from Prime Trust LLC, indicating the seriousness of the situation.
Prime Trust’s troubles have spread elsewhere in the crypto industry. Prime Trust subsidiary Banq went bankrupt on June 14, while Stably reported that it would shut down certain services linked to Prime Trust on June 22. BitGo’s planned acquisition of Prime Trust also fell through on June 22 as BitGo itself terminated the deal.
Previous reports indicated that Prime Trust had a shortfall of more than $82 million. The company provided custody services to institutional crypto investors among other services.
The post Nevada Court Orders Prime Trust Into Temporary Trusteeship appeared first on CryptoSlate.
