Jun 22, 2023 - Economy

Custodian Prime Trust suspends withdrawals following sale failure

An illustration of a vault being opened and light pouring out

Illustration: Rebecca Zisser/Axios

Following a canceled acquisition by rival custodian BitGo, Prime Trust began announcing to customers Thursday that it was suspending withdrawals.

Why it matters: Suspension of withdrawals has become a major signal of serious danger for any third-party firm in the blockchain business, and it's a considerable concern for a custodian (their business is entirely keeping deposits safe).

Catch up fast: Last year, Prime Trust was a target for one of the first crypto firms to fall into dire straits, Celsius, the lending firm.

Details: Stably, a firm that bridges traditional money and crypto, posted a blog post that shared an email it had received from Prime Trust, which said in part:

"Prime Trust regretfully informs all of you that, by order of the Nevada Financial Institution Division received on Wednesday, June 21st, 2023, Prime Trust is halting all deposits of fiat and digital assets for custody. We will also be halting all withdrawals of fiat and digital assets for custody. Please take action immediately to stop sending client custody assets to Prime Trust, especially digital assets."

Another source also shared this same email with Axios.

  • Coinmetro announced that the pause was causing an "unexpected disruption in USD transactions."

Emails sent to Prime Trust seeking comment were not immediately returned.

Of note: Reports of the deal for BitGo to acquire its rival first came out in early June.

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