Crypto News & Opinion Crypto Startup Bankrupt After Losing Password To $38.9 Million

[vtqhtr413]

Content source

https://slashdot.org/story/23/08/26/0318207/crypto-startup-bankrupt-after-losing-password-to-389-million-physical-crypto-wallet?utm_source=rss1.0mainlinkanon&utm_medium=feed

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.

 

[cartaphilus]

I hope the judge asks for the physical wallet to be forfeit to the federal government as part of the bankruptcy filling. The wallet can be returned once the company exits bankruptcy. Since I do not believe for a minute that the CEO lost the password.