- Aug 17, 2017
An anonymous reader quotes a report from 404 Media: A buzzy startup offering financial infrastructure to crypto companies has found itself bankrupt primarily because it can't gain access to a physical crypto wallet with $38.9 million in it. The company also did not write down recovery phrases, locking itself out of the wallet forever in something it has called "The Wallet Event" to a bankruptcy judge. Prime Trust pitches itself as a crypto fintech company designed to help other startups offer crypto retirement plans, know-your-customer interfaces, ensure liquidity, and a host of other services. It says it can help companies build crypto exchanges, payment platforms, and create stablecoins for its clients.
The company has not had a good few months. In June, the state of Nevada filed to seize control of the company because it was near insolvency. It was then ordered to cease all operations by a federal judge because it allegedly used customers' money to cover withdrawal requests from other companies. The company filed for bankruptcy, and, according to a filing by its interim CEO, which you really should read in full, the company offers an "all-in-one solution for customers that remains unmatched in the marketplace." A large problem, among more run-of-the-mill crypto economy problems such as "lack of operational and spending oversight" and "regulatory issues," is the fact that it lost access to a physical wallet it was keeping a tens of millions of dollars in, and cannot get back into it.