By Michael ScottThe leading crypto custodial firm Prime Trust has announced plans to cease operation on January 31 in Texas. Last December, Prime Trust failed to conform with the Texas Money Transmitter License (MTL) requirement. The crypto custodial assures its users that the firm will reapply for the permit to resume business in Texas.
Prime Trust Closing Operation
Over the past few years, Prime Trust has provided other crypto exchanges and FinTech firms with financial services and crypto-related services.
Last December, Prime Trust informed the customers that the company withdrew from applying for the Money Transmitter License (MTL). The unexpected move was supported by the director of communication Michelle Marin who proclaimed that Prime Trust has always complied with Texas regulations. He assured the Prime Trust community that the firm would reapply and resume operation.
In his recent addresses, Marin argued that engaging customers outside Texas on matters concerning the firm’s operation aimed at improving transparency.
Why is Prime Trust Exiting the Crypto Realm?
On January 24, the embattled crypto custodial firm posted a seizure from operation notice on the company website. According to the notice, the users are urged to withdraw their assets from the Prime Trust platform.
The report reveals that the crypto firm still needs to block withdrawal features. But within a short period, the firm intends to shut down completely all the Texas accounts.
The company will achieve this by engaging the key stakeholders, including the customer and owner of the affected accounts. The report disclosed that Texas residents would neither proceed with account openings nor engage in other financial transactions through their Prime Trust accounts.
In the meantime, the support team will continue providing service amid the closure of Texas operations.
Prime Trust Contravene with the Texas Regulations
In 2022, the Texas Banking Commissioner Charles G. Cooper accused Prime Trust of contravening Chapter 151 of Texas Financial policy. Cooper argued that the crypto custodial entity offered financial services without obtaining a permit from the authority.
On January 26 last year, Cooper demanded Prime trust pay a $29850 administrative fine for operating without a license.
He urged the firm either obtain a license to continue with the business or seize to operate in Texas.