Nevada Court Orders Prime Trust To Be Put Into Receivership
- A Nevada court has ordered crypto custodian Prime Trust to be put into receivership.
- The former CEO of the Bank of Nevada has been appointed as the troubled custodian’s receiver.
- The crypto custodian currently owes more than $85 million in fiat and digital assets to its clients.
- The receivership comes amid a cash shortage and allegations of misappropriation of customer funds.
Crypto custody firm Prime Trust has been placed into receivership by a Nevada court less than a month after a state regulator ordered the troubled firm to suspend operations. The latest development comes over a year and a half after the firm reportedly lost access to some of the wallets that stored crypto assets belonging to its clients. State regulators have accused the custodian of misappropriating customer funds.
Former Bank of Nevada CEO Appointed As Prime Trust’s Receiver
According to a report by Bloomberg, the Eighth Judicial District Court of Nevada ordered Las Vegas-based Prime Trust into receivership after the Nevada Financial Institutions Division requested the appointment of a receiver citing insufficient funds to meet customer withdrawal demands. Former Bank of Nevada CEO John Guedry was appointed as the receiver of the embattled crypto custodian.
Guedry will oversee the day-to-day operations of Prime Trust and make decisions in the best interest of its clients. As the receiver, the former Bank of Nevada executive is not authorized to approve any expenses over $500,000 without getting the court’s approval. The next hearing for this matter has been scheduled for August 2023.
The Court, having reviewed the points and authorities along with relevant exhibits filed in support of the Petition, including the consent of Respondent, finds good cause to grant the Petition.”
Nevada court on the petition for receivership
The receivership of Prime Trust comes less than one month after an acquisition deal with rival crypto custodian BitGo fell apart. This was followed by an order from the Nevada Financial Institution Division, directing the troubled custodian to shut down operations. The crypto custodian currently owes its clients more than $85 million in fiat and digital assets. Court filings showed that the firm had less than $3 million left.