Crypto custodian Prime Trust has been compelled to suspend deposits and withdrawals of both fiat and cryptocurrencies following an order from the Nevada Financial Institution Division (NV FID). This regulatory intervention has had a ripple effect on various industry participants, including fiat onramp service Stably, which relies on Prime Trust as its regulated custodian.
Stably notified its clients through a statement on its website, referencing a letter received from Prime Trust, a copy of which was obtained by industry publication, The Block. Prime Trust acknowledged the halt and expressed its commitment to resolving the concerns raised by the NV FID, with the goal of swiftly returning to normal business operations. The company stated its active engagement with the regulatory division to determine the necessary steps for remediation.
As a consequence of the disruption, Stably has been forced to pause certain services and operations until Prime Trust is able to resume its custodial functions. However, Stably remains determined to mitigate the impact on its users and expressed intentions to integrate new custodian partners to ensure the continuity of its services. The company assured its clients that details of these partnerships will be disclosed in the near future.
Despite the situation, the NV FID was unavailable for immediate comment when contacted by The Block. Similarly, Prime Trust has yet to respond to requests for comment on the matter.
In a related development, BitGo, a prominent crypto custodian, announced the termination of its planned acquisition of Prime Trust. This decision comes merely two weeks after the initial announcement of the acquisition, suggesting a reassessment of the viability of the deal in light of the regulatory hurdles faced by Prime Trust.
The crypto industry continues to navigate the evolving regulatory landscape, with compliance and adherence to regulatory standards playing a crucial role in the sustainable growth and stability of the market. Market participants and investors alike will closely monitor the developments surrounding Prime Trust and the actions taken to address the concerns raised by the NV FID.
