Court appoints a receiver for Prime Trust

The District Court of Nevada ordered Prime Trust, the crypto custodian, into receivership and named a receiver — John Gedri, the president of Bank of Nevada. CoinDesk reports.

According to a statement from the local Department of Business and Industry, the company’s overall financial condition had significantly deteriorated to a critically unsatisfactory level. As a result, the firm found itself in an unsafe or insolvent state.

In June, the regulator ordered Prime Trust to suspend deposits and withdrawals in fiat and digital assets due to a capital deficiency. petitioned the court to bar the crypto custodian from any business operations.

Prime Trust’s fiat liabilities amount to $85.67 million, while assets at its disposal barely exceed $2.9 million. In cryptocurrency, the firm owes clients $69.5 million but has only $68.65 million on hand.

Prime Trust was also accused of using customer funds to satisfy withdrawal requests from its ‘outdated wallets’.

In addition, the Department of Business and Industry filed an application to acquire the company and freeze all of its operations. The document was filed a few hours after BitGo announced its exit from the deal to acquire the crypto custodian.

Banq, the payments company linked to Prime Trust, filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code in the United States District Court for the District of Nevada.