Crypto custody firm Prime Trust has “a shortfall in customer funds” and was unable to meet all withdrawal requests this month, the Nevada Department of Business and Industry said Thursday.
The Department’s Financial Institutions Division, which oversees state-regulated trust companies, ordered Prime Trust to cease all activities which violate Nevada regulations, alleging that the company’s “overall financial condition … has considerably deteriorated to a critically deficient level.”
Prime Trust is “operating at a substantial deficit” or may even be insolvent, the order said.
“On or about June 21, 2023, Respondent was unable to honor customer withdrawals due to a shortfall of customer funds caused by a significant liability on the Respondent’s balance sheet owed to customers,” the order said. “Additionally, Respondent failed to safeguard assets under its custody and is unable to meet all customer withdrawals.”
Prime Trust may not be able to operate in sound manner if it were to continue, the regulator claimed.
Prime Trust can request a hearing within 30 days of the order. If it does not file for one, the cease-and-desist order will be deemed final.
