Prime Trust accused of using customer funds to cover lost deposits
Troubled cryptocurrency trust Prime Trust has been accused of using customer funds and venture capital to cover lost deposits, according to court documents filed by Nevada’s Financial Institutions Division (FID). Attorneys filed the petition on Monday to impound Prime Trust assets, appoint a receiver for rehabilitation, and bar Prime execs and employees from accessing accounts. The cryptocurrency trust is currently licensed as a money transmitter in 15 US states. Most major customers claim to have stopped using the custodian over the last few weeks — which has exacerbated its financial woes to the extent that regulators are worried the firm will do “irreparable harm” if a receiver doesn’t step in. “Prime is in an unsafe financial condition and/or is insolvent,” the FID warned in its petition. “ Prime condition will only progressively worsen as customers continue to withdraw.” The FID filed a cease and desist against Prime Trust on June 21, ordering i...