The Prime Trust scandal reminds us once again of the famous saying “Not your key, not your Bitcoin”.
“Trust” premium
Prime Trust is a bankrupt “crypto” company. One more after Celsius, BlockFi, etc, confirming again that it is more than risky to build on the quicksand, centralized and fraudulent shitcoinerie.
The first troubles appeared in recent weeks with a severe depeg of the stablecoin True USD (TUSD). Clients are jumping ship due to the setbacks of Prime Trust, where TUSD holds part of its reserves.
In the face of large pullbacks, the peg 1 TUSD = 1 USD is moving further and further away. The TUSD, whose capitalization reaches 2 billion dollars, is currently worth 0.90 dollars.
The veil was lifted after Bitgo’s takeover of Prime Trust was canceled a few days ago. Coindesk reports that the company is only holding $3 million against $85 million owed to its customers.
It also owes the equivalent of an additional $69.5 million in cryptocurrency for the equivalent of $68.6 million worth of cryptocurrency in its coffers.
These figures are available on the website of the FID of the State of Nevada (Prime Trust is a company registered in Las Vegas…) which asked in the justice of “immediately appoint a receiver authorized to visit the offices of Prime Trust to immediately supervise its operations”.
Chronology of events
In 2018, Prime Trust launched a cryptocurrency custody service. A year later, customer deposits are finally moved to the Fireblocks exchange.
In 2020, once the migration is complete, Prime Trust changes management. The latter apparently reuse old addresses that they believe belong to the Fireblocks exchange. This is not the case…
According to the FID, it was not until December 2021 that Prime Trust realized that it could not access these wallets… Instead of declaring itself bankrupt, the management faced withdrawals of cryptocurrencies by buying them thanks to to the dollars of other customers. And in particular the dollars of the stablecoin TUSD…
Worse, Prime Trust recently tried to get bought by Bitgo knowing full well that half of the funds are inaccessible.
The icing on the cake, it appears that the auditor who takes care of the TUSD stablecoin (and therefore of Prime Trust) is the same one who took care of the FTX accounts…
These guys literally audited the biggest scam in history and just changed their name?!? »
FTX Remake
We know that at the time of its bankruptcy, FTX did not own any Bitcoin. Sam Bankman-Fried’s exchange instead held astronomical sums of shitcoins like Serum.
Bis repetita with Prime Trust whose crypto assets consist of 88% of AUDIO. And only 10% bitcoin!
AUDIO is the token of the Audius company, a decentralized music streaming service running on Solana. Listening to music is free and artists are paid with AUDIO tokens.
The question everyone is asking is: why swapped customers’ BTCs for AUDIO tokens of dubious value?
Furthermore, these AUDIOs were exchanged for Prime Trust customers’ bitcoins and dollars “over the counter” (i.e. outside the market, without causing their value to fall).
If so, which celebrities have managed to sell their AUDIO bags to Prime Trust customers?
The good news is that Bitcoin remains on the upside. The fraudulent bankruptcies of the great crypto circus are now bringing ever more grist to the bitcoiner mill.
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