Prime Trust Blocks Crypto Sales
EKO has filed a complaint in Nevada state court claiming Prime Trust refused to fill orders investors placed as UST collapsed. This "trust" was serving the cryptocurrency investment sector denied requests by investors to redeem digital tokens for cash, despite a fiduciary obligation to do so.
When retail investors buy and sell cryptocurrency, the actual transactions are facilitated by trust companies serving the role of banks like Prime Trust. An investor using an exchange or wallet service provides access to their individual bank account so that funds can easily be withdrawn and deposited when the investor makes a transaction. But typically, the exchange/wallet does not interact directly with its customer's bank. Instead, both the exchange and the bank use technological infrastructure provided by a third party to make the transaction. These third parties call themselves "trusts," and they have an obligation to redeem cryptocurrency tokens for U.S. dollars upon the request of an investor.
When the cryptocurrency TerraUSD (UST) began to collapse in May 2022, hundreds of investors rushed to sell their UST tokens and redeem them for U.S. dollars. Prime Trust was a third-party trust company responsible for facilitating these transactions, but it denied countless requests, leaving investors helpless as their investments plummeted.
EKO has filed a class action against Prime Trust for violating its obligations owed to UST investors. If you were prevented from redeeming UST for U.S. dollars by a trust, please contact us.