Prime Trust

Prime Trust was a Las Vegas-based cryptocurrency custodian and fintech infrastructure company founded in 2016.²⁴¹⁰ The company filed for Chapter 11 bankruptcy protection on August 14, 2023, after Nevada regulators placed it into receivership due to insolvency.¹²⁴¹⁵ Prime Trust lost access to a physical crypto wallet containing $38.9 million and used customer funds to cover withdrawals, leading to an $82 million shortfall.¹²⁴

Timeline

Money raised

Prime Trust raised a $2 million seed round in May 2016 at a $6 million valuation.¹⁰ Prime Trust raised a $2 million Series A round in May 2017 at a $14 million valuation.¹⁰ Prime Trust raised a $1 million Series A round in May 2018 at a $16 million valuation.¹⁰ Prime Trust raised a $64 million Series A round in July 2021 led by Mercato Partners.³⁷¹⁰¹² Prime Trust raised a $107 million Series B round in June 2022 led by Fidelity Information Services at a $214 million valuation.³⁷¹⁰¹⁴ Prime Trust owed over $82 million to customers from missing fiat currency deposits, despite having $68 million in digital assets under custody.²⁴ Prime Trust used $76,367,247.90 in the aggregate to purchase ETH to fund customer withdrawals after losing access to the 98f Wallet.¹ The money stuck in the 98f Wallet was worth $38.9 million as of August 22, 2023.¹ Prime Trust owed customers roughly $85.7 million in fiat against approximately $2.9 million on hand, a hole of about $83 million.¹⁶ Around $45 million of customer assets sat stranded in wallets Prime Trust could not access.¹⁶

Investors named in the sources: Fidelity Information Services¹⁰¹⁴, Mercato Partners³⁷¹⁰¹², Kraken Ventures³⁷¹⁰¹⁴, Commerce Ventures³⁷¹⁰¹⁴, Seven Peaks Ventures³⁷¹⁰¹⁴, Samsung NEXT¹⁰, Nationwide Building Society¹⁰, s20 Capital¹⁰, University Growth Fund³⁷¹⁰¹⁴, Gaingels³⁷¹⁰¹⁴, GateCap Ventures³⁷¹⁰¹⁴, Decasonic³⁷¹⁰¹⁴, William Blair & Company³⁷¹⁰¹⁴, Fin Capital⁷¹⁴, 2048 Ventures³, Day One Ventures³, Eigenspace³, Golden Ventures³, Lerer Hippeau³, M13³, Multicoin Capital³, Ribbit Capital³, Staircase Ventures³, Trajectory Ventures³, Tobias Lutke³, Tom Williams³, Lightship Capital³, Noemis Ventures³, Sunset Ventures³, Tom Gonser³, Central Capital Ventura¹⁰, Diverse Angels¹⁰, Ayon Capital¹⁰, Nevcaut Ventures¹⁰.

What happened

Prime Trust was founded in 2016 as a blockchain-based infrastructure firm offering application programming interfaces (APIs) for financial institutions, fintech companies, crypto exchanges, and payment platforms.²⁴ Prime Trust was a Nevada-chartered trust company providing all-in-one financial infrastructure for fintech and crypto innovators.³ Prime Trust offered an API platform with services like custody, payment rails, liquidity, settlement, indemnity, compliance, and issuance.³ Prime Trust served cryptocurrency exchanges, broker-dealers, investment advisors, and others handling digital assets.³ Prime Trust provided escrow for Reg A, D, S, CF securities offerings, KYC/AML compliance, and custody for self-directed IRAs holding crypto and tokenized assets.³

Prime Trust served high-profile clients like Binance US, Swan Bitcoin, and BitGo.³ In March 2018, Prime Trust created cold-storage wallets for cryptocurrency assets, including the 98f Wallet.¹ Prime Trust set up the 98f Wallet so that those who could sign transactions needed physical possession of Trezor or Ledger hardware devices.¹ Prime Trust laser etched seed phrases into Cryptosteel Hardware devices called Wallet Access Devices instead of writing them down.¹ Prime Trust lost the Wallet Access Devices, making it impossible to access the 98f Wallet.¹

For several years, Prime Trust took customer deposits into the 98f Wallet, accumulating tens of millions of dollars.¹ In December 2021, when a customer requested a significant withdrawal of ETH, Prime Trust discovered it could not access the 98f Wallet.¹ Prime Trust used $76,367,247.90 in the aggregate to purchase ETH to fund customer withdrawals.¹ Prime Trust did not tell regulators or customers about the lost wallet access for months after discovering the problem.¹ Prime Trust raised a $64 million Series A round in July 2021 led by Mercato Partners.³⁷¹⁰¹²

Prime Trust raised a $107 million Series B round in June 2022 led by Fidelity Information Services at a $214 million valuation.³⁷¹⁰¹⁴ Prime Trust served around 700 customers, ranging from crypto exchanges, on-ramps, wallet apps, ATSs, RIAs, broker-dealers and banks.⁷ Prime Trust planned to use the Series B funds to launch a crypto-focused IRA retirement account, wealth management, and crypto staking products.⁷ Prime Trust expanded its team to 400 employees by June 2022.⁷ Prime Trust earned recognition as America's Best Startup Employer by Forbes and was included in CB Insights' Blockchain 50.²⁴

In January 2023, Prime Trust laid off one-third of its staff.⁸ In June 2023, BitGo signed a letter of intent to acquire Prime Trust but terminated the deal two weeks later.²⁴⁸ BitGo CEO Mike Belshe said Prime Trust did not have the necessary financials to complete the deal.⁸ Prime Trust subsidiary Banq filed for bankruptcy due to alleged mismanagement under former CEO Scott Purcell.²⁴ Prime Trust partner Abra was hit with a cease and desist order in Texas over securities fraud accusations.²⁴

Regulators said Prime Trust had improperly used customer funds to pay withdrawals since December 2021.²⁴ Prime Trust owed over $82 million to customers from missing fiat currency deposits, despite having $68 million in digital assets under custody.²⁴ Most of the digital assets under custody were held in an illiquid token rather than Bitcoin.²⁴ Prime Trust filed for Chapter 11 bankruptcy protection on August 14, 2023.¹⁵ Prime Trust said the bankruptcy filing would facilitate an orderly evaluation of options, including a possible sale of the company's assets.²⁴

John Guedry, former president of the Bank of Nevada, served as receiver and led a restructuring committee.²⁴ Judge Susan Johnson of the eighth Judicial District Court of the State of Nevada oversaw the receivership process.²⁴ Prime Trust continued to operate as debtors-in-possession under the bankruptcy court's jurisdiction.²⁴ Prime Trust planned to file motions to continue paying wages and providing benefits to ongoing employees.² The bankruptcy cases were jointly administered under Case No. 23-11161 before Judge J. Kate Stickles in the United States Bankruptcy Court for the District of Delaware.¹⁵

On July 18, 2025, Judge J. Kate Stickles ruled that commingled client assets were property of the bankruptcy estate.¹⁶ The court found that customer agreements had not created a trust relationship and that commingling made assets untraceable.¹⁶ Prime Trust's estate sued Strike, claiming it withdrew $29.5 million and 1,939 Bitcoin before the collapse.⁵ The estate sought to claw back at least $13.9 million and roughly 1,758 BTC from Strike.⁵ The estate also filed comparable actions against Compass Mining, Fold, and Galaxy Digital.¹⁶

The largest clawback action sought roughly $970 million from a single firm.¹⁶ The Plan Administrator issued notices to integrator customers regarding account treatment procedures and estate property determinations.¹⁵ The Plan Administrator requested additional documentation from MyConstant customers regarding proofs of claim.¹⁵

Legal outcomes

• filedThe Nevada Financial Institutions Division filed a petition to place Prime Trust into receivership in June 2023.²⁴
• filedPrime Trust filed for Chapter 11 bankruptcy protection on August 14, 2023.¹⁵
• filedPrime Trust's estate sued Strike, claiming it withdrew $29.5 million and 1,939 Bitcoin before the collapse.⁵
• filedThe estate filed comparable actions against Compass Mining, Fold, and Galaxy Digital.¹⁶
• pendingJudge J. Kate Stickles ruled that commingled client assets were property of the bankruptcy estate.¹⁶

Where the founders are now

Scott Purcell founded Prime Trust in 2016.³¹³ Scott Purcell was the former CEO of Prime Trust subsidiary Banq, which filed for bankruptcy due to alleged mismanagement.²⁴

Sources

1. 'The Wallet Event': Crypto Startup Bankrupt After Losing Password to $38.9 Million Physical Crypto Wallet, 404 Media, 2023-08-25
2. Crypto Custodian Prime Trust Files for Bankruptcy - Decrypt, Decrypt, 2023-08-15
3. Prime Trust: Funding, Team & Investors, Startup Intros, Jul 13, 20
4. Prime Trust Finally Bites The Bankruptcy Dust, Owes $82 Million | the deep dive, the deep dive, 2023-08-15
5. Prime Trust Estate Sues Strike Over $29.5M and Bitcoin Withdrawals Before Collapse, Coinpedia Fintech News, 2026-05-20
7. Prime Trust raises $100M to add IRAs, crypto staking, TechCrunch, 2022-06-22
8. It’s ‘going to be a struggle’ for customers of Binance-linked Prime Trust after BitGo terminates acquisition plan | Fortune, Fortune, Jun 22, 20
10. Prime Trust Valuation, Funding & Investors | Multiples, multiples.vc, Sep 18, 20
12. Financial infrastructure firm Prime Trust secures $64m ..., fintechfutures.com
13. Prime Trust LLC Asset Profile | Preqin, preqin.com
14. Fundraising News, Financial IT
15. Prime Core Technologies Inc., et al., cases.stretto.com
16. What Was the Prime Trust Bankruptcy? – Onramp, Onramp Bitcoin, 2026-06-24

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