{"id":20074,"date":"2023-07-18T21:46:58","date_gmt":"2023-07-18T21:46:58","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/nevada-court-approves-regulators-petition-to-place-prime-trust-into-receivership-pending-hearing\/"},"modified":"2023-07-18T21:47:02","modified_gmt":"2023-07-18T21:47:02","slug":"nevada-court-approves-regulators-petition-to-place-prime-trust-into-receivership-pending-hearing","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/nevada-court-approves-regulators-petition-to-place-prime-trust-into-receivership-pending-hearing\/","title":{"rendered":"Nevada court approves regulator’s petition to place Prime Trust into receivership, pending hearing"},"content":{"rendered":"

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The Eighth Judicial District Court of Nevada has granted a petition from the state\u2019s Financial Institutions Division (NFID) placing crypto custodian Prime Trust into receivership \u2014 pending a hearing to show cause.\u00a0<\/p>\n

In a July 14 filing, the Nevada court ordered the appointment of a receiver for Prime Trust following a June 26 petition from the state financial regulator. Prime Trust will have an opportunity to show cause why the petition should not be permanently granted in an Aug. 22 hearing. <\/p>\n

\u201cThe court appointed receiver will take over the day-to-day operations of the company to determine the best option to protect Prime\u2019s clients,\u201d said the NFID.<\/p>\n

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The Eighth Judicial District Court of Nevada has ordered Prime Trust LLC into temporary receivership pending an August order to show cause hearing. NFID has modified its Order to Cease and Desist. Read both here: https:\/\/t.co\/buQKb9PNWe pic.twitter.com\/nXBn0xB5jH<\/a><\/p>\n

\u2014 Nevada Department of Business & Industry (@NevadaDBI) July 18, 2023<\/a><\/p><\/blockquote>\n

The order requires Prime Trust\u2019s employees and executives to largely not take any actions interfering with the court\u2019s decision. According to court filings, Prime Trust agreed to the petition for receivership with the Financial Institutions Division based on the \u201csubstantial deficit between its assets and liabilities.\u201d<\/p>\n

At the time, the Nevada financial regulator called for the immediate appointment of a receiver due to the risk of \u201cirreparable harm\u201d to users, the public and \u201cconfidence in the emerging market of cryptocurrency\u201d. The Financial Institutions Division said Prime Trust was \u201cunable to honor customer withdrawals\u201d as part of a June 21 cease and desist order.<\/p>\n

Related: <\/em><\/strong>TrueUSD assures users it has no exposure to troubled Prime Trust<\/em><\/strong><\/p>\n

According to the June 26 petition, Prime Trust owed more than $85 million in fiat and $69.5 million in crypto to its clients. However, the firm reportedly only held roughly $2.9 million in fiat and $68.6 million in crypto.<\/p>\n

Prior to Prime Trust\u2019s financial woes, wallet infrastructure provider and digital asset custodian BitGo had been considering an acquisition of the firm. The deal was officially called off by BitGo on June 22, roughly one day after the NFID issued its cease and desist order.<\/p>\n

Magazine: <\/em><\/strong>Get your money back: The weird world of crypto litigation<\/em><\/strong><\/p>\n