Topic: Prime Trust's bankruptcy due to forgotten seed/private key - page 2. (Read 308 times)

They misused their customers' funds and experimented with different coins. By investing in TerraUSD they lost their customers' $6 million dollars funds Prime Trust Lost $8M in Doomed Terra Stablecoin Investment, CEO Says so they misused their customers' funds as they wished and eventually declared themselves bankrupt!

The fact that who was running such a big company would make the mistake of forgetting the private key is the biggest surprise, it doesn't seem believable to a common man like me. It's actually a story they made up. Due to their one wrong decision after another the company has gone into losses and now they have come up with this story so that they don't have to return the remaining funds to the customers. This incident brings yet another warning to crypto users about how important it is to keep funds to yourself, because Not Your Keys, Not Your Coins.

Until it happens to them most people will never learn, it is sad but that is the way it works as those people simply assume that something like this will never happen to them and it only happens to others, and then when it finally does they cannot believe this is the case and they feel indignant about it, now if they are smart they may learn after such loss, but even a great deal of those which were scammed will still not learn their lesson and they will need to experiment this many times before their behavior finally changes.

This is too bullshit reason to file bankruptcy for their losses since they are custodial company which ironic to lost their keys while their service is safely manage invetors funds.  Losing private key is the most convenient reason to file loss on crypto since it’s very to prove that you are lying unless polygraph test is admissible in court.

This is an exit plan and probably this coin will sleep in there for a long time untile the issue cool down while solving everything using the bankruptcy funds.

In the famous words of the Sith Lord: Good, good!
Less bitcoins on the market.


That's the sad part. I bet these people had no idea what they were buying. They watched CNBC for a while and googled how to get bitcoin easy without a risk of being hacked or scammed... so they got someone who could do it for them and... that's how they got scammed.

Yes, I think that it was a scam. There's no way someone would start a bitcoin company without knowing how to create backups.
That said, Karpeles changed Magic the Gathering card trading site into a bitcoin exchange and scammed everyone, so shit sure happens in this industry.

I think that these corporations have got the idea of what they're doing from the first ones that have probably done the same thing. And they're not just a few but several companies that hides their main purpose and tries to stir things up through making it like they're a dumb company that have lost the password for their corporate wallet.

Well, it's not going to change for a long time not until everyone has been a victim of these services and lost the funds that they've worked hard for. The trust that one's commit is because they're registered and covered by government laws. But these people don't know that when situation like this escalates, there's no way the government can help them get those refunds if all has been wiped. Everyone will learn the lesson the harsh way even if we don't want to.

That's sad. It's really possible that they can get away, give some excuse that they have really forgotten the wallet to make people gullible that they really do. For sure that there's gonna be orgs or individuals that will monitor the wallet that have been said that they've lost. So, no surprises if it gets accessed by anyone and soon may be told as "hacked" wallet and funds to reason again.

As much as we don't want investors to experience something like this, it's like this event is inevitable as there will be more newbies that will come to the market prior to the bull run halving. And the sad thing is that they're going to trust more of these custodial services than to listen to the people that tells them to hold their own crypto.

That's probably right that funds could have been gone and gambled, and this is possible due to what happened to FTX fiasco and Bankman's spending. As for the shit coin: Prime Trust Lost $8M in Doomed Terra Stablecoin Investment, CEO Says and there could be more.

We're all feeling bad and sympathy is always with the victims and not with these greedy corporations that have been using their customer's money as their ladder for their own personal gains and sakes. I am pretty sure that there could be people interested on this case and won't be dumb to believe their potential fake story.

Maybe on Service Discussion?

I guess it's gonna be long until we will finally hear the real story behind this but, it would be amazing and good to hear someone inside that can't take what's happening and will speak the truth behind this.

Yeah, sooner or later the truth will come as this is still a developing story and news but one thing is for sure that they've filed for bankruptcy. I remember that story also about killed CEO that he's the only one who knows the keys. I think that we're seeing the same story and style but if the story about that and life was taken for real, rip to him.

The story is hard to believe and laughable that such a company like prime trust would be this negligence to lose their private keys understanding fully the importance of those keys not just to them but to the multitude of investors that have placed their financial trust on them. There's more to this story that we can't determine at this stage and time.

If the keys are later to be found by some anonymous group or fellow years probably when the case would died down then I'll believe what the tiny voice in my ears is telling me, that yeah it may be an exit plan and not negligence.

This is what will continue to happen as people continue making same mistakes of keeping their funds in the custody of a third party. When you care-less of taking responsibility of your private keys by holding your funds in a selfcustody wallet you should be ready to accepts these sorts of stories because it will keep happening one way or the other, accept it or not.

Such types of companies do not only provide services to protect shit coins; instead, they provide services to protect all types of assets like bonds, stocks, forex, and BTC too. But there is an obvious thing that those who are well aware of the nature of BTC know: what it is promoting and why people are adopting it, referring to its decentralization nature. Then why would people deposit their funds or BTC on such a platform that cannot even hold their hands on the keys and recovery phases they have made?

This definitely looks like a rug-pulling plan, but we should not jump to conclusions so fast; instead, read the whole story. But honestly, even after reading the story, it seems so unbelievable to think that a company mainly made to provide protection services has lost the key to their wallets. I mean for real.

A lot of companies are just some shell companies which are used for bad purposes like Money laundering and these companies are mostly not new. They are old ones to gain trust of the people on it and when they gain enough money they do this. As they have a legit reason to. I hope this issue will be resolved with the help of some recovery operation if some legit investigator will do it.

Well, it's also very easy to claim the keys or seed was lost/misplaced.
I won't say the loss is for real or not, it's also hard to prove anything. The only proof could be if one of those owners (or a random employee maybe!) suddenly disappears (goes under the radar for a great retirement).

You know, one would expect for a fintech company they'd use multisig wallet, to make not only safer, but also more fair if there are more owners, but meh...

How could a company not prevent this because it doesn't have a lot of backup initial phrases? Obviously this would not have made sense and ironically it seems to be planned to file for bankruptcy of their company.

The only thing they are protecting is worthless shitcoin which is clearly their negligence with a lot of misuse of customer funds.
It's like a drama they are planning, how can a company buy shitcoins that have no liquidity?

This seems to be so unbleivable that one like me will definitely say this is just an exit plan because if it's a fintech company, then how did they come to lose the keys to funds, and first of all, why are they keeping all the funds in a single address? To be honest, I feel sad for the ones who lost their funds, but AFAIK, if they would hire someone good at investigation, then the chances are that they might get access to the key. Of course, the recovery operation depends on which device (HW, software wallet) they are using: did they create the recovery key using offline systems or online? Did they create the key using some specific cypher with some key? Then they might regenerate the key.

I mean, if they are managing the funds of others, then they at least should create the key from some generators with their own encryption key to enhance the security, and if they do it, then they must use the same key to regenerate the key.

And I do not know how this is directly related to Bitcoin, which you made a topic of this discussion.

From the https://decrypt.co/152508/prime-trust-chapter-11-bankruptcy link:


So they lost the keys AND bought a ton of some shitcoin / token.

Since they are / were a Nevada company might as well as gone to Las Vegas and bet it all in a video slot machine. This was you can see all the blinking things on the screen as your money disappears.

And their website is still up and running without a mention of what is going on.

Another day, another bunch of people who can't figure out the magical internet money machine is a myth.

-Dave

It's Ironic that a company that is supposed to provide custody for the cryptocurrency has actually lost the seed/ recovery seeds so now all those funds are stuck?

I don't know how many lessons are needed for investors to remember the significance of self-custody of their crypto assets to mitigate this kind of situation. As far as I can read it's about 40 Million dollars worth of assets it's huge so hopefully people will take this into consideration next time if they opt for custodial service.

One more reason to say Not Your Keys, Not Your Coins.

This is obviously a hoax. Anyone storing 40 million dollars worth of assets will take at least the precaution of having a backup, if it's a company they will have several backups held by different members of the board or put it in a multi sig wallet so no singular member of the board can sign a transaction without the other.

They will probable wait a while and then claim another party has possibly gained access to the wallet, and then liquidate all the funds on it through mixers and the court will not be able to act cause they do not have any proof of the scam.

So weird to see that some people are still interested in using this services for nothing than to later regret about their decision with them, mamy we should assume it's a mistake common to newbies or even most user's experience in tgis know about the risk but can't help thwn to deliberately risk their asset with thm, when it's not your keys the coins does not belong to you, this is ot a joke but the fact of the matter, i believe with this same experience, eome have learnt their own in the hard way.

This is absolutely a planned exit bud, never should we believe all these lies that they tell us, a criminal will always have an excuse and when coming up with such excuse, they will look for one that seems very true and appealing and believable.

I personally believe that nobody in their right senses will lose a private key or seed phrase to a wallet containing such an amount of money, 38.9 million dollars is not child's Play, they have probably planned it all and are ready to Battle/defend this claim whether it takes them years,  at the end of it all, when everyone has forgotten, they will quietly withdraw this money and start enjoying themselves meanwhile those that have lost have lost...

Not your keys,  not your crypto , those who have refused to listen and believe in this the soft way,  will have to learn to believe it in the hard way.

So, this news was a few weeks ago and I haven't seen someone posted it yet. Just a quick background of what Prime Trust is, it's a fintech company that manages assets of its customers, yeah a custodial service. See the reference:


Going on, they've filed for Chapter 11 (bankruptcy) and if we're going to search for some reasons behind that. Mostly, it's all about the mismanagement, liquidity issue and misuse of its customers funds, etc. which is written all over several articles:

• Crypto Custodian Prime Trust Files for Bankruptcy
• Crypto custodian Prime Trust files for Chapter 11 bankruptcy
• Crypto Custodian Prime Trust Files for Bankruptcy Protection

and many more...

Now the part that I've like to share is their negligence of one of the main reason why they fell is because its owners have lost the control to their keys. Yes, you've heard that right, they've lost the seed phrase of their wallet.

• Crypto Startup Bankrupt After Losing Password To $38.9 Million Physical Crypto Wallet

They've got tons of customers and money on their custody and they just lost it. Maybe a planned exit? or just truly negligence of its owners.

This is the reason why we shouldn't keep funds into these centralized/custodial services and exchanges.