Prime Trust's Financial Troubles Attributed to Mismanagement and Wallet Issues 🔥🔥
- A document submitted to the U.S. Bankruptcy Court in Delaware by Prime Trust CEO Jor Law has shed light on the reasons behind the company's bankruptcy.
- The previous management team's blind expansion of spending, coupled with misjudgment of the encryption #market in the summer of 2022, contributed to the financial troubles.
- The company also lost access to the physical device required to access its old wallet.
- Prime Trust incurred significant losses, with expenses outweighing revenue. In October, they spent $10.5 million while earning about $3.1 million, resulting in a net loss of over $7 million. The following month, expenses increased to $11.1 million, leading to a net loss of approximately $8.4 million.
- An additional problem emerged when the company realized they could no longer access the "98f wallet," which held tokens since 2018.
- To address customer withdrawal needs, some employees used fiat currency to purchase ETH between December 2021 and March 2022, spending over $76 million.
- A $6 million loss of customer #funds and $2 million in treasury funds due to an investment in TerraUSD further compounded the company's financial issues.
- Due to these challenges, Prime Trust filed for Chapter 11 #bankruptcy protection in Delaware. The company's estimated liabilities range from $100 million to $500 million, with asset values between $50 million and $100 million.
