Cryptocurrency custodian Prime Trust lost $8 million to the terraUSD algorithmic stablecoin, which collapsed in May 2022, leaving the investors with over $40 billion of losses. Of the $8 million that Prime Trust lost, $6 million was customers’ funds and $2 million from its treasury, CEO Jor Law said in a court filing.
Law was appointed interim CEO in November 2022 in a leadership transition that saw Tom Pageler exiting. In his court filing, Law said that the company had to spend $76 million to meet withdrawal requests from users who were told to send funds to the wrong wallet, to which the company had no access.
In June, Prime Trust had a customer shortfall of $83 million in fiat and $861,000 in digital assets, Law told the court.
In June, the Financial Institutions Division of the State of Nevada filed a court petition to place Prime Trust in receivership after it found it was operating in an “unsafe and unsound manner.” Prime Trust’s cup of woes only increased after the fall of Celsius Network and FTX.
On August 15, Prime Trust filed for Chapter 11 bankruptcy protection in Delaware.