Key Points
- Prime Trust, the regulated custodian for Stably, has suspended all deposits and withdrawals of fiat and digital assets.
- BitGo, a digital asset trust and security company, has terminated its acquisition of Prime Trust
- Prime Trust has been asked by state regulators to freeze their assets and has halted all withdrawals of fiat and digital assets for custody.
Stably made an announcement on June 22, reporting that Prime Trust has stopped all deposits and withdrawals of fiat and digital assets temporarily for custody. The crypto trading platform stated that they are currently working towards the integration of new custodian partners while Prime Trust is striving to restore normal operations as soon as possible.
ANNOUNCEMENT: Our regulated custodian, @PrimeTrustCo, has temporarily suspended all deposits and withdrawals. More information here: https://t.co/j1B65mP6yY
As Prime Trust continues working to restore normal operations as quickly as possible, we are diligently working on…
— Stably (@Stably_Official) June 22, 2023
Service Suspension for Stably
In this recent announcement, Stably also revealed that it has been forced to suspend its services due to an unexpected suspension from its crypto custodian, Prime Trust. The suspension was communicated to Stably on June 21, with Prime Trust advising the company to immediately halt the transfer of client custody assets, especially digital assets.
Stably has relied on Prime Trust’s services as its regulated custodian, funds processor, convertible virtual currency exchanger, and administrator. As a result, Stably has had to suspend its deposits, withdrawals, trading of digital assets, and even the minting of stablecoins.
Prime Trust has stated that it is actively engaging with the Nevada Financial Institution Division (NV FID) to determine the next steps to remediate any concerns and return to business as usual as soon as possible. Unfortunately, the Nevada regulators ordered Prime Trust to end its operations on June 22 after the crypto custodian was unable to satisfy customer withdrawal requests. Adding to the woes, Prime Trust’s subsidiary, Banq, filed for bankruptcy on June 13.
Prime Trust under Scrutiny
BitGo, a digital asset trust and security company, has announced the termination of its acquisition of Prime Trust. This comes at the same time as Prime Trust, which raised $107 million in June 2022, faces numerous challenges and has been asked by state regulators to freeze their assets.
After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust. This decision was not made lightly and BitGo remains committed to our mission to deliver trust in digital assets.
— BitGo (@BitGo) June 22, 2023
BitGo CEO, Mike Belshe, stated that after signing a letter of intent with Prime Trust, it became clear that the company did not have the necessary financials to complete the deal.
As a result, Prime Trust and now Stably have become the latest casualties in the U.S. war on crypto, leaving customers with funds locked on the platforms to suffer. The market turmoil is expected to continue for some time, leaving many wondering about the future of the crypto industry.
End Note
Stably’s customers are left in a precarious position, with no clear timeline for when the suspension will be lifted. The situation highlights the challenges and risks associated with relying on third-party providers, especially in the volatile and rapidly evolving crypto industry.
