- The Department of Business and Industry issued a “cease and desist” order
- The company has 30 days to challenge it or file for bankruptcy.
- Regulator claims Prime Trust is insolvent
- Since June 21, the company cannot cover withdrawal requests
Hours after BitGo pulled out of a deal to buy Prime Trust, the infrastructure provider received an order from a regulator in Nevada. The company has suspended operations due to lack of funds to cover withdrawal requests.
This information was confirmed by the Nevada Department of Business and Industry. And here here You can read more about the “cease and desist” order.
According to the regulator, Prime Trust has been unable to fulfill withdrawal requests since June 21. At the same time, the state of the company was assessed here as “critically unsatisfactory”, and it cannot continue its activities.
The order states that the Prime Trust deliberately violated fiduciary duties. What dictated the decision of the regulator. The company has 30 calendar days to file for bankruptcy or challenge the order in administrative court. If the infrastructure provider overrides the Department’s decision, it will be considered final. Consequently, the company will be reorganized, sold or liquidated under the patronage of the federal authorities, as was the case with Signature.