Prime Trust, a crypto custodian, has filed for bankruptcy protection due to a number of missteps. In a court filing, Prime Trust CEO Jor Law detailed how the company’s woes were the result of a combination of the rapidly declining crypto market and poor management decisions.
The filing revealed that in October and November of last year, Prime Trust spent around $10.5 million and $11.1 million respectively, while only bringing in $3.1 million in revenues. This resulted in net losses of $7 million and $8.4 million.
The company was further battered by the failure of TerraLUNA, with Prime Trust putting $8 million of its own and client funds into the venture before it collapsed. Furthermore, the company mistakenly locked itself out of its own cryptocurrency wallet, leaving it with no access to over $76 million in assets.
The situation only worsened when two Prime Trust partners were targeted by state securities regulators and a merger deal with crypto custodian BitGo fell through. In June, Nevada regulators moved to shut down Prime Trust, revealing that the company owed over $85 million in fiat and $69.5 million in cryptocurrencies.
Faced with no other option, Prime Trust filed for bankruptcy on August 14th.