Crypto custody firm Prime Trust has been ordered by Nevada's Department of Business and Industry to cease all activities that violate state regulations.
The Regulator Alleges That Prime Trust is "Operating at a Substantial Deficit"
Crypto custody firm Prime Trust has been ordered by Nevada's Department of Business and Industry to cease all activities that violate state regulations, citing the company's "overall financial condition...has considerably deteriorated to a critically deficient level."
The regulator alleges that Prime Trust is "operating at a substantial deficit" or may even be insolvent and breached its fiduciary duties. The company reported more than negative $12m in stockholders' equity position at the end of March 2023.
Hours after BitGo said it was ending its proposed acquisition of Prime Trust, the order was posted on the regulator's website. Soon after the deal was canceled, a number of businesses stated that Prime Trust had stopped all fiat deposits in compliance with Nevada regulators' directive.
The cease-and-desist order will be declared final if Prime Trust does not request a hearing within 30 days after the order. The regulator issued the cease-and-desist on June 21, blocking Prime Trust "from accepting fiat and cryptocurrency from existing and new clients for custody purposes."
