Around December 2021, Prime discovered that it was unable to access some of its wallets where it stored cryptocurrency, according to the petition. From December 2021 to March 2022, Prime purchased additional digital currency using customer money from its omnibus customer accounts to satisfy withdrawals. According to the filing, Prime Trust created a digit wallet in 2018 for holding crypto for its customers.

BitGo Agrees to Purchase Rival Crypto Custodian Prime Trust

BitGo has expanded from offering wallets to providing a full-suite solution that lets clients hold assets safely and then put them to work. BitGo launched BitGo Trust Company in cryptocurrency cfd trading 2018, providing fully regulated, qualified cold storage to complement BitGo Inc’s original hot wallet solution. In 2020, BitGo launched BitGo Prime, which allows its clients to trade, borrow, and lend. Moreover, BitGo also provides access to DeFi, staking, NFT wallets, and beyond, and serves as the world’s sole custodian for WBTC, or wrapped Bitcoin.

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Cryptocurrency custody firm BitGo has reached a preliminary agreement to buy Prime Trust, another crypto custody specialist regulated in the state of Nevada, according to two people familiar with the matter. Custodian BitGo dropped its plans to purchase Prime Trust on June 22, the day of Nevada’s cease-and-desist order, alleging a shortfall of customer funds, became known. Prime Core Technologies Inc. files for Chapter 11 bankruptcy protection in Delaware, according to a court filing. Five Minute Finance has influenced how I see finance – I rely on it for insight on the latest news and trends at the intersection of finance and technology. In its press release, BitGo highlighted three key expected benefits of its likely acquisition of Prime Core Technologies. First, it is simply viewing the addition as the next expansion of its already-significant network of regulated trust companies.

I received a random email from a prime core technologies stating they were filing for bankruptcy. When I search google I find prime core has dealings in crypto and I found an article saying Binance.US was connected to them. The petition asks the court to appoint a receiver to take over the day-to-day operations of the company and examine its finances, in order to decide whether it should be liquidated or revamped.

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The combination of Prime Trust and BitGo would be a significant enhancement for the industry.No other company will have the breath of product and services nor depth of experience that this combined company would have. We are excited to offer our world-class infrastructure within a broader ecosystem and revolutionize the future of crypto. Founded in 2013, BitGo pioneered the multi-signature wallet and later built TSS to improve upon other companies’ MPC offerings. Between multi-sig and TSS, BitGo offers the safest technology on the market and safeguards over 600 tokens across a wide variety of blockchains.

• The motion was made with the Eighth Judicial District Court of Nevada, after determining “that Prime is operating in an unsafe and unsound manner and is insolvent,” as alleged in its prior cease-and-desist order from June 21.
• The 30-page receivership petition filed Monday demands an immediate impounding of all assets of Las Vegas-based Prime Trust, as well as its documents and records.
• Specifically, October and November reported steep net losses of $7.4 million and $8.4 million, in that order.
• Named to CB Insights Blockchain 50 and the Fintech 250 in 2022, Prime Trust is a trust company that offers digital asset infrastructure tools.

BitGo also processes approximately 20% of all global Bitcoin transactions by value. Prime Trust once played a significant role in the infrastructure of crypto markets, holding funds on behalf of companies like FTX, Binance.US and Celsius Network. Custodians typically hold dollars and digital assets on behalf of customers, putting the funds in their own accounts. The firms are meant to be among the safer parts of the financial system, not engaging in risky activities. The 30-page receivership petition filed Monday demands an immediate impounding of all assets of Las Vegas-based Prime Trust, as well as its documents and records. It also asks the court to enjoin Prime, including its officers and agents, from touching any of the company’s funds.

On 15 August 2023, the company officially entered bankruptcy proceedings in the U.S., citing liabilities hovering between $100 million to $500 million and a creditor count ranging from 25,000 to 50,000. This move was further precipitated by a Nevada court’s intervention, which mandated the appointment of a receiver for Prime Trust to mitigate potential is nordvpn safe 2 examples that would answer that threats to users and the nascent cryptocurrency sector. Palo Alto, California-based BitGo said in a statement that it signed a non-binding term sheet to acquire 100% of the equity of Prime Core Technologies Inc. Despite its reputation, Prime Trust suffered a series of setbacks in recent months. More recently, it has been named in SEC’s lawsuit against Binance for the services it provided for the exchange’s US affiliate. But in late 2022, Jor Law — a long-time board member of Prime Trust — was appointed as the company’s new CEO to turn the company around.

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It than used the digital asset platform Fireblocks to store all crypto assets held in custody, though the original wallet continued to exist and was marked as inactive. After the migration to Fireblocks was completed, Prime Trust came under new management, led by Tom Pageler. Nevada has asked a federal court to appoint a receiver for Prime Trust, alleging that the custodian used customer funds to buy cryptocurrencies after losing access to digital wallets containing tens of millions of dollars in assets. The need for safekeeping and storage of cryptocurrencies, particularly for institutional customers and high net worth individuals, has driven vela ready for bitcoin futures trading on cboe and cme digital asset custody to prominence, with many flavors on offer and firms commanding high valuations. Securities and Exchange Commission (SEC), which has put out proposed rulemaking on custody issues.

The Nevada Financial Institutions Division had ordered Prime Trust to halt all deposits of fiat and digital assets from within the state of custody. Named to CB Insights Blockchain 50 and the Fintech 250 in 2022, Prime Trust is a trust company that offers digital asset infrastructure tools. Prime Trust powers innovation in the digital economy by simplifying the complexity of building with digital assets, making it easier for its customers to build, launch, and scale quickly and compliantly. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence.