August 27, 2023.
In a court filing seeking bankruptcy protection, Prime Trust, a battered crypto custodian, outlined a series of missteps contributing to its financial downfall. CEO Jor Law attributed the company’s struggles to irresponsible spending, misjudgment of the crypto market implosion in summer 2022, and a failure to adapt to changing circumstances. Prime Trust incurred significant losses, with spending exceeding revenues, reaching a net loss of over $7 million in October and $8.4 million in November. The collapse of TerraLUNA, in which Prime Trust invested client and company funds, and a management decision that locked the company out of its own cryptocurrency wallet further compounded its troubles. The wallet, holding assets estimated at over $45 million, became inaccessible, leading to workaround measures and further financial challenges. The court filing provides insight into Prime Trust’s financial struggles and the complex landscape of the cryptocurrency custodial industry.