Cryptocurrency custody service Prime Trust abruptly suspended withdrawals last night. On June 21, US financial regulators issued a cease and desist order against the platform.
BitGo’s purchase of crypto platform Prime Trust canceled
BitGo was expected to acquire Prime Trust before abandoning the deal on June 22. Prime Trust suspended withdrawals last night after the deal was cancelled. The financial regulators of the US state of Nevada reported that the Prime Trust was particularly unable to protect user funds and process withdrawals.
The stop order states that Prime Trust’s financial condition has “deteriorated to a critically inadequate level.” He says the firm is currently in an “unsafe and unhealthy state” and “is in a significant deficit and/or has gone bankrupt”. Meanwhile, stablecoin firm TrueUSD has announced that it is unaffected by the current challenges Prime Trust is facing…
PrimeTrust has suspended all deposits of fiat and digital assets. #TrueUSD (#TUSD) is not affected by this situation. We have no exposure to Prime Trust and maintain multiple USD rails for minting and redemption. Rest assured, all your funds are safe with TUSD.
— TrueUSD (@tusdio) June 22, 2023
In light of the latest news, TrueUSD has announced that Prime Trust is “unaffected by the stop order.” TrueUSD stressed that it is diversifying its partnerships and maintaining “multiple USD rails” elsewhere. The announcement was:
PrimeTrust has suspended all fiat and crypto withdrawals. TrueUSD (TUSD) was unaffected. We are not subject to Prime Trust and hold multiple USD rails for printing and redemption. Peace of mind, all your money is safe with TUSD.
TUSD price loses dollar stability
Prime Trust is a technology-focused custodian that provides a variety of services to crypto companies. Their offerings include token and fiat storage, money processing, Anti-Money Laundering compliance, etc. covers solutions. The company plays a very important role, especially in supporting the cryptocurrency ecosystem.
In the early hours of June 10, TUSD deviated from the dollar peg due to the temporary cessation of mining operations facilitated by TUSD’s technology partner Prime Trust. The outage caused TUSD to drop to its low of $0.9964.
BitGo withdraws from deal to buy Prime Trust
Behind the scenes, BitGo said on June 22 that Prime Trust “made the tough decision to end its acquisition”. BitGo stated that it has made significant efforts and is working towards a way forward. In a tweet, he said, “We didn’t take this decision lightly. BitGo remains committed to our mission to build trust in cryptocurrencies.”
During the same period, TrueUSD (TUSD) ceased printing on Prime Trust until further notice. Also, at the time, there was speculation that the Prime Trust had gone bankrupt. Talking about the failed purchase, Bitcoin Magazine CEO David Bailey said that any exchange that uses Prime Trust’s service and has transferred funds from its platform in the past three months may be subject to a buyback.
Banq bankruptcy filing
Banq, a subsidiary of Prime Trust, announced its bankruptcy this month, as we quoted as Kriptokoin.com.
43895
