Prime Core Technologies, the parent company of crypto custodian Prime Trust, has admitted to losing about $8 million in customer and treasury funds due to TerraUSD (USTC) investments.
The firm is currently undergoing Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the District of Delaware.
In its Aug. 24 filing, the firm said that the losses occurred “under prior management” when the algorithmic stablecoin crashed in May 2022. The filing also blamed the bankruptcy on increased spending in October and November 2022.
The filing stated that the company was affected by the crypto winter, which reduced its revenues, even though it was not the main cause of the receivership and the Chapter 11 cases.
Prime Trust filed for bankruptcy in August, estimating its liabilities to be between $100 million and $500 million and its creditors to be between 25,000 and 50,000.
The bankruptcy followed a Nevada court’s decision to appoint a receiver for Prime Trust because of the potential “irreparable harm” to its users, the public and the crypto market’s reputation.