1. In a recent motion, Jor Law, interim CEO of Prime Core, supports the Chapter 11 bankruptcy proceedings of Prime Trust, revealing instances of improprieties within the company.
2. Prime Trust, a crypto custodian and on-/off-ramp provider, faced a shortfall of customer funds, leading to bankruptcy.
3. The company incurred an $8 million loss after Terra's collapse, with $6 million being customer funds.
4. The "wallet event" highlighted a security flaw in the 98f Legacy Wallet used to store customer crypto.
5. Prime Trust shifted assets to Fireblocks for storage, but issues arose when customer crypto was forwarded to the 98f Wallet outside Fireblocks.
6. Employees accessed wallet devices to tap customer accounts and used funds to buy ether for withdrawals.
7. Around $76 million was spent on ETH to fund customer withdrawals.
8. The company's prior management continued excessive spending, leading to substantial net losses despite revenues.
9. Regulatory problems emerged as state regulators revoked/suspended licenses during a capital raise and BitGo's plan to buy Prime Trust was terminated.
10. Prime Core seeks to protect assets, reinstate licenses, and explore third-party financing, recapitalization, and potential sale.