Nevada court orders Prime Trust into temporary receivership

A Nevada court ordered prominent cryptocurrency custodian Prime Trust, which is currently facing financial difficulties, to become a temporary trustee on July 18, officials acknowledged. The Nevada Eighth Judicial District Court has approved a petition from the Nevada Department of Financial Institutions (NFID) placing Prime Trust as temporary trustee.

Former Bank of Nevada and other financial institution executive John Gedley has been appointed trustee pending a permanent court order. Gedri will oversee Prime’s day-to-day operations. He also intends to scrutinize the company’s finances and find out how best to protect Prime Trust’s customers.

NFID said it could not provide legal counsel or advice to Prime clients, and advised Prime Trust clients to contact John Gedley directly.

Gedri’s trusteeship will continue until at least the Shaw Cause hearing scheduled for August 22, 2023. Otherwise, the hearing could affect Prime Trust’s ability to operate.

The Prime Trust crisis began almost a month ago

NFID originally issued a cease and desist order against Prime Trust on June 21, saying the company was unable to meet customers’ withdrawal requests. It also ordered the company to stop accepting funds at the time.

NFID then placed Prime Trust in receivership on June 26, citing bankruptcy concerns and the company’s apparent failure to maintain a safe and regulated operating environment as required by NRS 669. petitioned to be placed in This claim was made with the consent of Prime Trust LLC. , indicating the seriousness of the situation.

Prime Trust’s problems have spread to other parts of the cryptocurrency industry as well. Bank, a subsidiary of Prime Trust, declared bankruptcy on June 14, while Stable reported on June 22 that it would suspend certain services related to Prime Trust. Bitgo’s planned acquisition of Prime Trust also fell through on June 22, with Bitgo itself closing the deal.

Earlier reports had put Prime Trust in a deficit of more than $82 million. The company provided custody services to cryptocurrency institutional investors alongside other services.

A Nevada court has ordered Prime Trust to enter temporary custody, first published on CryptoSlate.

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