Irresponsible spending. Misjudging summer 2022’s crypto market implosion. Getting locked out of its own cryptocurrency wallet. These are some of the missteps detailed in a court filing submitted by battered crypto custodian Prime Trust as it seeks bankruptcy protection. 

In a filing with the U.S. Bankruptcy Court in Delaware on Thursday, Prime Trust CEO Jor Law explained how the company was battered by a combination of the collapsing cryptocurrency market and a management team that failed to change course amid the plunge. Instead, Law—who became interim CEO last November—said the company’s previous leaders doubled down on spending at a time when revenues were strained.

According to Law, Prime Trust spent about $10.5 million in October against revenues of about $3.1 million, giving it a net-loss of over $7 million. A month later, the spending rose again to $11.1 million, costing it another net loss of about $8.4 million.

Among the events that hit the company directly last year was the collapse of TerraLUNA last May after the failure of Terra’s UST stablecoin and LUNA governance token. Law said that Prime Trust put $6 million in client funds and $2 million from its own treasury into Terra before it failed. 

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Author: Nicholas Morgan

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