Fiat-to-crypto on-ramp and trading platform Stably is the latest to suffer problems with payment providers. Its regulated custodian, Prime Trust, has temporarily suspended all deposits and withdrawals.
On June 22, Stably announced that Prime Trust had temporarily halted all deposits and withdrawals of fiat and digital assets for custody. The crypto trading platform added:
“As Prime Trust continues working to restore normal operations as quickly as possible, we are diligently working on integrating new custodian partners as well,”
Stably Suffers Service Suspension
The announcement noted that Prime Trust, a crypto custodian, informed the firm of the service suspension on June 21.
It told the company to “take action immediately to stop sending client custody assets to Prime Trust, especially digital assets.”
Stably relies on Prime Trust as its regulated custodian, funds processor, convertible virtual currency exchanger, and administrator. Therefore, the firm also announced the suspension of deposits, withdrawals, trading of digital assets, and minting stablecoins.
Prime Trust stated that it was “actively engaging the NV FID (Nevada Financial Institution Division) to determine the next steps to remediate any concerns and return to business as usual as soon as possible.”
Nevada regulators ordered Prime Trust to end operations on June 22 after the crypto custodian was unable to satisfy customer withdrawal requests. Moreover, Prime Trust subsidiary Banq filed for bankruptcy on June 13.
Stably is a venture-backed fintech firm from Seattle, Washington. According to its website, it provides “regulatory compliant stablecoin infrastructure” and multi-chain fiat on/off-ramps for emerging blockchains, Web3 wallets, and applications.
Regulatory Crackdown on Prime Trust
The move comes at the same time as digital asset trust and security company BitGo announced its decision to terminate its acquisition of Prime Trust. On June 22, the firm stated:
“After considerable effort and work to find a path forward with Prime Trust, BitGo has made the hard decision to terminate its acquisition of Prime Trust.”
Prime Trust raised $107 million in June 2022 but has faced numerous challenges in the last eight months, reported Forbes.
BitGo CEO Mike Belshe told Fortune that they signed a letter of intent with Prime Trust two weeks ago. However, “it became clear that Prime Trust did not have the necessary financials to complete the deal.”
“The state regulator asked them to freeze their assets because they need to go in and sort things out,” he added.
Prime Trust and now Stably have become the latest victims of the U.S. war on crypto. And the market turmoil will likely continue for some time. As usual, it is the customers with funds locked on the platforms that suffer.
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