The Financial Institutions Division’s filing included claims that Prime Trust contracted Fireblocks to store all its crypto assets in 2019, and underwent a change in management in 2020. The custodian reintroduced legacy wallet forwarding addresses to customers in January 2021"because of limitations" with Fireblocks. Prime Trust has not had access to its users’ legacy wallets since December 2021, and purchased crypto using customer funds.
According to the petition, Prime Trust owed more than $85 million to its clients in fiat, but had only roughly $2.9 million as of the filing. The Nevada regulator said Prime Trust’s liability in digital assets was smaller but still significant: the firm owed more than $69.5 million in crypto but held roughly $68.6 million.
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