Prime Trust lost 27k ETH then tried to buy it back…with customer money

This was something ive been paying attention to considering its probably the most legitimate source of FUD circulating atm, and it looks for real as Prime Trust is headed for receivership. For anyone not familiar with Prime Trust, theyre a major banking partner for TUSD and Binance US acting as a custodian. Recently there were issues with redemptions/minting of TUSD and withdrawals and deposits were suspended. An acquisition was slated by BitGo but they backed out presumably after seeing their books. It all begs the question, how can a custodian be in that bad of shape? Their main function is to take money and store it while collecting fees. No commingling, leveraging or rehypothecating required.

I guess it all goes back to the Fireblocks debacle in 2021 where someone lost the keys to the Prime Trust account holding 27,000 ETH and tried to fill that hole with customer deposits.

1. It is understood that from December 2021 to March 2022, to satisfy the withdrawals from the inaccessible Legacy Wallets, PRIME purchased additional digital currency using customer money from its omnibus customer accounts.

Prime Trust owes customers over $85M in cash with only ~$3M on hand. They owe $69M (nice) but have $68M in their accounts. Not bad but according to Arkham about 88% is in $AUDIO. Not exactly your most liquid holdings.

This raises even more questions as the main banking partner for the $3B TUSD holdings that they custody. Prime Trust has been falsely reporting on audits and attestations that they were all gravy (defs crime) so how is TUSD maintaining its peg? What about the Binance Launchpool with $590M TUSD staked? Coincidence that Binance has no fee TUSD pairs as of a week ago? How were they able to mint $2B TUSD while this was all happening?

This all seems like a shitshow between Binance and TUSD and i think theres going to be alot more unearthed through the downfall of Crime Trust.