The collapse of Prime Trust has many concerned about the future of secure custody solutions in the crypto sector. Whether you’re a displaced customer of Prime Trust looking to better understand your options or an observer trying to understand what this news means for the future of digital asset management, sFOX wants to answer your questions in a special edition of our webinar series.
In this webinar we cover
- The timeline that led to Prime Trust’s collapse
- The steps in the receivership process for a public trust company that are not Chapter 11
- How to evaluate whether a custody provider’s services are actually safe to use
The session went beyond the surface by dissecting the nuances between receivership and bankruptcy, a topic often muddled in confusion. John Mannino, sFOX’s Chief Compliance Officer, meticulously explained that receivership isn’t a standalone legal process, but rather an adjunct solution aimed at aiding creditors and potentially rescuing companies on the brink of financial disaster. As discussions unfolded around the roles of impartial receivers and trustees, the webinar encouraged critical evaluation of such mechanisms’ efficacy and their potential impact on companies’ fates. Amidst uncertainty and speculation, this webinar served as a platform for dissecting the implications of Prime Trust’s collapse, provoking thoughtful consideration of the future of digital asset management.
On June 21st, Prime Trust was ordered to halt operations while its regulator looks to take over. Can you explain who Prime Trust is and who their clientele is? 1:55
What happened that caused the crypto custodian to be in this situation? 3:02
What does it mean to be in receivership, and is it the same as being in a bankruptcy? What are the steps in the receivership process for a public trust company? 9:27
How are Wyoming public trust companies different from Nevada trust companies with regard to a process like this? 14:32
Why did Wyoming choose banks, instead of non-banks, to service digital assets? 19:56
Do Nevada trust companies undergo annual reviews? How was this situation just now uncovered? 24:25
Can you explain what a clawback is and how it works? 30:00
Prime Trust marketed that they were a qualified custodian. How do I know moving forward which custodians are actually safe to use? 35:02
What should a trader/client be focused on when choosing a custodian? 45:50
How does sFOX handle new clients looking to transition out of Prime Trust over to a new custodian? 48:25