Prime Trust has been placed in receivership following a Nevada court approval of a petition against it. The crypto custody firm owes clients millions of dollars in fiat and crypto.

Prime Trust, a once-bubbling digital assets custody firm, has officially been placed in receivership by Nevada authorities.

Insolvent or near-insolvent companies are placed in receivership mode to enable the smooth running of the outfit by an authorized entity and realize its assets for debt repayments. John Guedry has been appointed as the Prime Trust receiver.

The Nevada Financial Institutions Division (FID) petitioned for receivership of Prime Trust in June, citing operational instability and insolvency risks. 

The court has put Prime Trust in receivership pending a hearing in August. 

Prime Trust’s issues

Prime Trust’s woes reportedly began in late 2021 when the company lost access to some of its crypto wallets. The company once offered crypto and fiat custody services to businesses like the collapsed Sam Bankman-Fried’s FTX, Celsius Network, and others. 

Last month, the FID also issued a cease-and-desist order against Prime Trust, citing a substantial deficit in customer funds. 

BitGo, a leading crypto custody company, backed out of its acquisition deal with Prime Trust last month. BitGo announced the termination of the purchase on June 22. However, the company did not state the exact reason behind that decision.