TechFlow news — In documents filed with the U.S. Bankruptcy Court in Delaware, Prime Trust CEO Jor Law explained how the company was hit by both the collapse of the cryptocurrency market and the management team’s failure to pivot during the downturn.
According to Law, Prime Trust spent approximately $10.5 million in October while generating only about $3.1 million in revenue, resulting in a net loss of over $7 million. One month later, expenses rose again to $11.1 million, leading to another net loss of roughly $8.4 million.
In addition, Law detailed how company executives used "cold wallets" to hold tokens including ETH and ERC-20 compatible tokens. A wallet known as the "98f wallet," established in March 2018, was a device requiring physical possession and multiple signatures for access. In 2019, Prime Trust migrated its wallets to a system operated by digital security platform Fireblocks. However, the company failed to realize that the migration from the old wallet to the new system was incomplete, and continued providing customers with deposit addresses linked to the 98f wallet.
To this day, Law stated that Prime Trust still cannot access the 98f wallet. Law added that from December 2021 to March 2022, "certain company employees" began using fiat funds from customer accounts to purchase ETH and fulfill withdrawal requests, deploying more than $76 million in customer funds.
