In the famous words of the Sith Lord: Good, good!
Less bitcoins on the market.
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.
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.
Sad for those people that didn't do their due diligence that they can do what PT can do for them. Just a filling of Chapter then everything's gone, good and goodbye.
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.
Hard to believe, right? They thought that many people would buy on their alibi. But, we're not part of those people but only their customers. When they filed for that, for sure that these poor victims won't have a way to contest that if this chapter 11 has been filed. And you're right, when the bull run comes, their coins is gonna be like an awakened dragon ready to get transferred and won't have any trace from whom to whom.
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.
The reasons were combined, misused, mismanagement and with that reason of losing the password. They can think of any other reasons that they can but their clients were the pity ones on this case.
At first, I was just looking at this thread with no clue as to what the company was really about, as this is the second time I've come across this name, if I'm not mistaken. I was thinking it was some kind of company that is based on helping users keep their wallet phrases and private keys safe, and I almost said there should be little to nothing to worry about here since users can still reclaim their funds if they have the access at their end intact. But this is not the case, and all funds in custody are in their hands.
But what the heck is wrong with some institutions, like exchanges, where customers will trust you with their funds security as if that's not enough, and you as an exchange will take these funds and entrust them with other bodies that you see as more professional bodies to manage those funds? What's the stress of creating a multi-signature wallet and taking security upon yourself by knowing what responsibilities you have to play to make sure that customers funds are secured?
But let me ask a question because this still seems unclear to me: were there some kind of benefits that depositors get by giving out their holdings for prime trust to hold, or are they still the ones to be charged for prime trust security charges? I'm just wondering what will happen to the faith of Coinsbit customers who have their funds stored with the exchange if this escalates more than this and it appears that there is no coming back of those lost funds.
Another good incident to remind the public that “Not your key, not your coin”...
They're like fund managers AFAIK, they're the ones to manage the money of the depositors and it's up to them whether they're going to invest it somewhere elsewhere. So basically, they're like a bank but they're serving two sectors, the fiat and cryptos.
Another one bites the dust!!!
And they only have one task to do, that is to protect their customers. And if they really know that they have lost the seed/private key, then why not have a investigation? They simply declare bankruptcy right away? I will echo the same sentiments here, it's very clear that they messed up and they want to hid everything thru Chapter 11 and hide their incompetency.
True, there should be a process to it but it seems that they don't wanna hear any investigation so filing bankruptcy is the easiest way to go. If a complainant comes on and asks for an investigation for this one, much better to see.
It doesn't even matter if it's an exit scam or a legitimate screw up, it's a yet another precedent that crypto companies can lose your coins and you won't get back anything from them in court. Those people who want to be exposed to Bitcoin but not personally own it for some reason need to be ready to lose their investment in this way. So they should choose very-very carefully and not entrust their money to a startup that popped up yesterday. Better choose a company that has decades of positive reputation, though even that won't be a 100% insurance.
Yeah, that's the whole point when we're entrusting our funds into a centralized platform. Whether they're like Prime Trust that offers various services and connections to the real world or the typical exchanges that we have on this market. While with a more reputable company, just don't put still a 100% trust.
It might or might not be a lie. They can post the wallet and if it never moves then obviously they weren’t lying. If you think its bad, Ftx also stored private seeds for billions in an unencrypted text file over some cloud network.
There were other exchanges in the past that also lost money because their computer crashed and they lost the private key to customer funds. These days with hardware wallets this shouldn’t happen however. Especially since there are many ways like multi sig to keep funds safe.
With these companies that holds millions to billions of people's fund, I think they should have prioritize how to keep it properly with a proper back up. But on this case, it seems that it's not the whole point of it. There are many thoughts that are playing in our minds especially when people's money are involved.
It's an ironic, I mean that's just make people think there's no safe place to hold Bitcoin since centralized entity can bankrupt and losing seed phrase in non custodial wallet resulting losing all of our coins.
But for people who're already understand about Bitcoin, they know which one is better and centralized entity can't be trusted since it can't be verified. Maybe now Prime Trust's cold storage is still contain Bitcoins, but after next few months all the coins are moved and then they will give excuse if their wallet might be hacked.
Those people that are entrusting more the platforms that themselves, these people could have been staying here for so long but they're lazy to understand how to make their own wallets and keep it to themselves like the seeds or private keys. It doesn't need to go into this situation before someone has to learn it but that's it, others have to learn the hardest way.
I do not buy the "lost the Private keys" angle to this story, because a professional company will never be that negligent. Imagine someone losing the keys to a Bank vault....
I bet you, someone are going to "find" those Private keys when the bankruptcy are done and they are going to live in the lap of luxury on some island where they cannot be touched.
You will be amazed by the so-called "team" that are behind some of these custodial services... most of them are from the corrupt Banking services, where they were taught how to steal from people.
It is the thought of many have been thinking since it's a big financial company that has people's money and gets into the crypto space, they're aware of this scenario that if ever they lost the password, they'll never get it back. But the story if going to be connected with other reasons, it's sort of coming from being negligent while being allowed to use people's money resorting into this reason.
How can an establishment has a whopping $38 millon dollars worth of assets in a wallet and forgets to write down the seed phrase? It doesn't make sense, a crypto firm like this shouldn't make such a costly mistake. Individuals do make more than one back up and a crypto custodial company couldn't make a single backup, which is one of the first thing to do when creating a wallet. At some point, it did not occur to them that the wallet wasn't backed up, so that they could move the funds to a different wallet. Funds like that should have been in a multisig wallet where more than one person has access to. I don't believe this story, it is clearly an exit scam.
For knowledgeable people you and the others here, it is what we'll think first about a multisig wallet. Where there will be a couple of people that's been composed to be the trustee of these seed phrases. But it seems that not that much info about that.
Holy F, this is a big mistake from their side. How can they forget a private key if they are working as a Fund Manager for others? This is so sad and also wrong for the people who invested with them.
However, this should give a lesson to others who were willing to invest money under other's wallet and can simply invest in Crypto or any asset directly using their brain cells. Still, it's sadge.
It's like that it's not really a mistake on their end but it's more of like an excuse just as what others were saying on this thread. And only one thing that we're thinking of with this and that's like going into an exit through chapter 11.
This is complete nonsense, how could a crypto investment management company lose access to their wallet, this is truly an absurd reason. Even a non-tech savvy person can back up their passwords on their device, let alone a startup that manages millions of dollars in assets, there's no way they can lose access to that wallet. Surely this is an excuse made up by them, so that they can take away all the assets under management and hold them for a long period of time and then sell them later, the authorities should carry out an investigation into this startup.
If the right time comes and it's surprisingly seen that the funds have moved from their main address, then we know what it is.
