Nevada asks for Prime Trust to be put in receivership, reports $82M deficit
According to an official press release dated June 27, Nevada regulators have petitioned the court to place Prime Trust LLC in receivership.
The Nevada Department of Financial Institutions (NFID) said it has asked the court to appoint a trustee to manage the day-to-day operations of Prime Trust. After investigating the company, the trustees may return Prime Trust to private management or liquidate the company.
Regulators want restrictions
The NFID also called for restrictions to prevent Prime Trust members from accessing or moving company funds. The Recipient may take ownership of Prime Trust’s property and assets and take any action necessary in connection with the proceedings.
The body of the application further states that Prime Trust should request a trusteeship and a hearing be held within 15 days.
The move follows a cease and desist order issued by NFID on June 23, in which the regulator said Prime Trust was unable to meet customer withdrawals. At the time, it ordered the company to stop accepting fiat and cryptocurrencies.
Current Financial Status of Prime Trust
Regulators said Prime Trust lost access to certain “legacy” cryptocurrency wallets in December 2021, but the company continued to buy cryptocurrencies to meet customer withdrawals. The company still does not have access to those wallets.
NFID also said withdrawals have increased at Prime Trust. Both of these factors made it impossible to accommodate withdrawals.
Prime Trust currently has a fiat deficit of $82.8 million. Despite owing $85.7 million to customers, it has only $2.9 million on hand. It also owes customers $69.5 million in crypto assets, but with $68.6 million on hand, the crypto loss is even smaller at $861,000.
For unknown reasons, Prime Trust appears to hold a large amount of Audius (AUDIO) tokens.Arkham Intelligence report The company has $61 million in AUDIO, representing 31% of its AUDIO supply, more than any other asset.
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