1. BITBILIHome
  2. Article

Prime Trust’s wallet disaster: $82m gone, trust shattered

• 58 views

TL;DR Breakdown

  • Crypto custodian Prime Trust lost access to their legacy wallets in 2021, leading to an outstanding debt of $82 million to customers.
  • Prime Trust attempted to meet withdrawal demands from these inaccessible wallets by using other customer funds, but the efforts were in vain.
  • The company owes $85,670,000 in fiat currency, with only $2,904,000 available, and $69,509,000 in digital currency with just $68,648,000 in hand.

Description

The beleaguered Bitcoin and cryptocurrency custodian, Prime Trust, grapples with the fallout from losing access to their legacy wallet system last year. Now, the company faces a formidable debt of $82 million to its clientele, shattering the trust many once placed in their secure storage capabilities. Access lost, coffers depleted Last year marked a grave … Read more

The beleaguered Bitcoin and cryptocurrency custodian, Prime Trust, grapples with the fallout from losing access to their legacy wallet system last year.

Now, the company faces a formidable debt of $82 million to its clientele, shattering the trust many once placed in their secure storage capabilities.

Access lost, coffers depleted

Last year marked a grave misstep in the history of Prime Trust. In January 2021, the company reverted to using specific legacy wallet forwarding addresses, a move driven by limitations when creating new wallets within the Fireblocks platform.

At that point, Prime Trust reportedly believed these legacy wallets were either on the Fireblocks platform or would forward to wallets accessible therein.

However, by December 2021, Prime Trust discovered its grave error: they were unable to access the legacy wallets and the cryptocurrency stored within.

From December 2021 to March 2022, Prime Trust attempted to satisfy withdrawals from these inaccessible legacy wallets by purchasing additional digital currency with customer funds from its omnibus customer accounts.

The efforts to regain access to the legacy wallets have thus far been futile, leaving the company in a precarious financial situation.

The financial precipice: Trust in tatters

The financial toll of this debacle is staggering. Prime Trust owes its clients a whopping $85,670,000 in fiat currency, with a mere $2,904,000 available to meet this liability.

This imbalance has created a fiat currency shortfall of $82,766,000. The firm’s digital currency liabilities are no less challenging, owing $69,509,000 to clients but only possessing $68,648,000 in digital assets.

Their most substantial holding is $61 million in AUDIO, with their second-largest holding being 245 BTC, valued at a comparatively measly $7.5 million.

Interestingly, Prime Trust owns 31% of the circulating supply of the Audius Project, a decentralized music platform. Despite their considerable AUDIO holding, the most liquid venue for this asset, Binance, only moved $3.7 million of volume over the past 24 hours.

Mounting concerns over Prime Trust’s financial situation have resulted in a sharp increase in customer withdrawals, many of which are for substantial sums.

This development has put further strain on Prime Trust’s already frail financial status. If this trend persists, Prime Trust’s condition is expected to worsen progressively as more customers withdraw their assets.

Prime Trust’s saga serves as a stark warning to the wider crypto-industry. The inability to access their legacy wallets and subsequent financial difficulties expose the perils of mismanaging digital assets.

Furthermore, it underscores the critical importance of secure and accessible storage solutions in maintaining trust in crypto custodians.

With its finances in dire straits and trust eroded, Prime Trust now faces the mammoth task of regaining access to its inaccessible legacy wallets and, more importantly, rebuilding the trust of its clients.

The days ahead look challenging, and the industry watches as the company strives to navigate its way out of this debacle.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

文章来源于互联网:Prime Trust’s wallet disaster: $82m gone, trust shattered

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年6月30日 10:15
Next 2023年6月30日 11:04

Related articles

  • Economic guru reveals foolproof method to spot recession

    TL;DR Breakdown Robert Kiyosaki, author of ‘Rich Dad Poor Dad,’ suggests a simple method to spot a recession: if your neighbor loses their job, it’s a recession; if you lose yours, it’s a depression. Kiyosaki has warned of a potential global recession and suggested investments in gold, silver, and bitcoin as protection during unstable times. Various economic experts have diverse predictions for a recession, from a “severe deflationary recession” to “no significant recession” this year. Description Acclaimed author Robert Kiyosaki, renowned for his seminal work, ‘Rich Dad Poor Dad,’ presents a refreshingly simple approach to identify a recession. His lens of understanding the state of an economy is as unique as it is straightforward, casting a new light on the traditional approach to assessing economic health. Kiyosaki’s simple rule: The neighbor’s … Read more Acclaimed author Robert Kiyosaki, renowned for his seminal work, ‘Rich Dad Poor Dad,’ presents a refreshingly simple approach to identify a recession. His lens of understanding the state of an economy is as unique as it is straightforward, casting a new light on the traditional approach…

    Article 2023年6月28日

  • Judge slams Biden officials’ censorship on social media as violation of first amendment

    TL;DR Breakdown A federal judge in Louisiana, Terry Doughty, recently issued a ruling stating that the Biden administration likely violated the First Amendment by censoring unfavorable views on social media during the coronavirus pandemic.  In his 155-page opinion, Judge Doughty compared the United States government’s actions during the COVID-19 pandemic to the fictional “Ministry of Truth” from George Orwell’s novel 1984.  The ruling takes immediate effect, but it is not a final decision and can be appealed by the Biden administration to the 5th U.S. Circuit Court of Appeals in New Orleans. Description A federal judge in Louisiana, Terry Doughty, recently issued a ruling stating that the Biden administration likely violated the First Amendment by censoring unfavorable views on social media during the coronavirus pandemic. Judge Doughty referred to these efforts as “Orwellian” and issued a preliminary injunction that prohibits several federal officials and agencies from contacting social … Read more A federal judge in Louisiana, Terry Doughty, recently issued a ruling stating that the Biden administration likely violated the First Amendment by censoring unfavorable views on social media during…

    Article 2023年7月7日

  • China’s digital yuan gets a game-changing makeover

    TL;DR Breakdown Changchun Mu, the director of the Digital Currency Research Institute of the People’s Bank of China, emphasized the desire of digital yuan developers to see it integrated into all online retail payment options. One of the key points Mu raised was the integration of the digital yuan into popular payment platforms and applications used by consumers, including those operated by commercial banks, WeChat, and Alipay. Description Changchun Mu, the director of the Digital Currency Research Institute of the People’s Bank of China, made an intriguing announcement regarding China’s central bank digital currency (CBDC), also known as the digital yuan on September 3. Speaking at the annual China International Service Trade Fair, Mu highlighted the ongoing technological and business model upgrades that … Read more Changchun Mu, the director of the Digital Currency Research Institute of the People’s Bank of China, made an intriguing announcement regarding China’s central bank digital currency (CBDC), also known as the digital yuan on September 3. Speaking at the annual China International Service Trade Fair, Mu highlighted the ongoing technological and business model upgrades…

    Article 2023年9月4日

  • DEA loses $50,000 in crypto to scammer’s sophisticated scheme

    TL;DR Breakdown A scammer swindled over $50,000 in cryptocurrency from the Drug Enforcement Administration. DEA, responsible for curbing illegal narcotics, has faced security breaches, with a significant loss of over $500,000 in cryptocurrencies reported in May. The US Marshals detected the scam and alerted the DEA, who then sought to freeze the fraudulent account via Tether. Description A scammer has managed to swindle over $50,000 in cryptocurrency from the Drug Enforcement Administration (DEA). This audacious theft employed a unique combination of monitoring, airdropping, and deception. The DEA, a division of the US Department of Justice, primarily focuses on curbing the flow of illegal narcotics within and across US borders. However, this recent … Read more A scammer has managed to swindle over $50,000 in cryptocurrency from the Drug Enforcement Administration (DEA). This audacious theft employed a unique combination of monitoring, airdropping, and deception. The DEA, a division of the US Department of Justice, primarily focuses on curbing the flow of illegal narcotics within and across US borders. However, this recent incident has spotlighted vulnerabilities in their operations. Significantly, this isn’t…

    Article 2023年8月26日

  • Top blockchain accelerators in 2023

    TL;DR Breakdown In 2023, blockchain accelerators have experienced significant growth and expansion, with the demand for blockchain technology surging across multiple industries. Accelerators in 2023 have developed specialized support programs tailored to meet the unique needs of blockchain startups.  Leading blockchain accelerators have expanded their operations internationally, recognizing the global nature of blockchain innovation. If you are a blockchain startup founder in the early phases of developing your company, blockchain accelerators can help you. With chances for blockchain and crypto companies growing, now is the moment to board the rocket ship. It’s critical to understand that there are blockchain accelerators and incubators. Pay attention to the differences and similarities in both, as well as their unique features. Contents hide 1 What are blockchain accelerators and incubators? 2 Blockchain Accelerators to pay attention to in 2023 2.1 1. Alta 3 2. Blockchain Founders Fund 4 3. Boost VC 4.1 4. dlab Programmatic Venture Capital 4.2 5. GBV Capital What are blockchain accelerators and incubators? Blockchain accelerators are programs or initiatives that provide support, resources, and mentorship to startups or projects working…

    Article 2023年6月9日
TOP