TL;DR Breakdown
- Prime Core Technologies, the parent company of crypto custodian Prime Trust, disclosed an $8 million loss through investments in TerraUSD (USTC).
- Prime Trust disclosed that it acquired Ethereum (ETH) worth $76.4 million to fulfill customer withdrawal requests following the loss of access to specific funds.
Description
In a recent bankruptcy filing, Prime Core Technologies, the parent company of crypto custodian Prime Trust, disclosed an $8 million loss through investments in TerraUSD (USTC), shedding light on the financial turmoil that contributed to the company’s bankruptcy. The loss, which occurred when the algorithmic stablecoin TerraUSD collapsed in May 2022, included $6 million in … Read more
In a recent bankruptcy filing, Prime Core Technologies, the parent company of crypto custodian Prime Trust, disclosed an $8 million loss through investments in TerraUSD (USTC), shedding light on the financial turmoil that contributed to the company’s bankruptcy. The loss, which occurred when the algorithmic stablecoin TerraUSD collapsed in May 2022, included $6 million in client funds and $2 million in treasury funds.
Prime Trust’s investment in collapsed TerraUSD leads to major losses
The collapse of TerraUSD was considered one of the significant events leading to a major crypto market crash in 2022. Several firms, including FTX, BlockFi, Celsius Network, and Voyager Digital, either collapsed or filed for bankruptcy that year. Prime Trust’s investment in TerraUSD resulted in the loss of millions of dollars, contributing to the company’s financial difficulties.
In August, Prime Trust declared bankruptcy in the US, with liabilities estimated to be between $100 million and $500 million. The company had around 25,000 to 50,000 creditors. The decision to file for bankruptcy came after a Nevada court ordered the appointment of a receiver for Prime Trust. The court believed that if action wasn’t taken, it could cause “irreparable harm” to users and the cryptocurrency market.
In addition to the TerraUSD investment loss, Prime Trust’s financial woes were exacerbated by its spending habits and an unrelated wallet loss. In October and November 2022, the company’s spending resulted in net losses of $7.4 million and $8.4 million, respectively.
In its recent filing, Prime Trust disclosed that it acquired Ethereum (ETH) worth $76.4 million to fulfill customer withdrawal requests following the loss of access to specific funds. This problem arose when the company transferred its crypto to Fireblocks storage service in July 2019 and mistakenly directed users to send funds to an inactive crypto address, leading to the firm’s inability to access those funds.
In conclusion, Prime Trust’s bankruptcy filing has unveiled a complex web of financial missteps, including significant losses from TerraUSD investments, excessive spending, and an unrelated wallet loss. The company’s failure, marked by an $82.8 million fiat deficit and $861,000 in cryptocurrency deficits, provides a cautionary tale for the crypto industry.
文章来源于互联网:Prime Trust unveils $8 million loss from TerraUSD collapse in bankruptcy details