Nevada regulator says Prime Trust has customer funds shortfall.

The Nevada Department of Business and Industry has stated that Crypto custody company Prime Trust has experienced a shortage of customer funds and was not able to fulfill all withdrawal requests this month. The Financial Institutions Division of the Department, which oversees trust companies regulated by the state, has ordered Prime Trust to stop all activities that breach Nevada regulations, claiming that the company’s overall financial situation has significantly deteriorated to a critically deficient level. The order states that Prime Trust is operating at a substantial deficit or may even be insolvent.

The order stated, “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. Additionally, Respondent failed to safeguard assets under its custody and is unable to meet all customer withdrawals.”

The regulator claims that Prime Trust may not be able to operate in a sound manner if it continues. Prime Trust has the option of requesting a hearing within 30 days of the order. If it does not request a hearing, the cease-and-desist order will be considered final.

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