Prime Trust's Financial Woes A Mere Ripple In The Crypto Ocean, Experts Say

Crypto custodian Prime Trust may be under scrutiny, but the broader digital-asset market appears to be in a recovery phase and is poised for growth in the coming years, observers say.

What Happened: Nevada's Department of Business and Industry declared Prime Trust "critically deficient" and in "unsafe or unsound condition." The order comes after crypto custody firm BitGo terminated its intended acquisition of Prime Trust, citing an unfeasible partnership.

The development led to a shortfall of customer funds and the firm's inability to honor customer withdrawals. Prime Trust "materially and willfully" breached its fiduciary duties by failing to safeguard assets under its custody, regulators argued. The firm is also alleged to be incapable of meeting all customer disbursement requests.

What The Experts Say: The crypto industry is transitioning from a "crypto winter" to a "crypto spring," according to Pastel Network co-founder Anthony Georgiades.

Geogriades, a General Partner at Innovating Capital, noted that the liquidations of 2022 have mostly played out and the industry is now in a recovery phase, citing BlackRock's recent filing for a Bitcoin ETD.

As for Bitcoin BTC/USD, it's difficult to predict where it's headed, he adds.

Currently, the industry is in an accumulation phase where both retail and institutional investors are increasing their exposure to Bitcoin, Ethereum, and other major digital assets. A new bull run triggered by the Bitcoin halving event expected next year is possible.

Ethernity Chain CEO Nick Rose Ntertsas doesn't believe that Prime Trust's issues will significantly impact the broader digital asset market.

Like Georgiades, Ntertsas suggests that the market is now in a recovery phase. Expect a slow and choppy ascent for Bitcoin and other major crypto assets in the coming months, he cautions.

Also Read: Singapore's MAS Unveils Groundbreaking Framework For Digital Asset Ecosystem

Umee CEO Brent Xu also doubts that the problems facing Prime Trust are representative of systemic issues within the crypto market.

The industry has moved on to another part of the cycle, with investors scaling into BTC and other digital assets in a more pronounced way, he explained.

Broader adoption of digital assets is likely, especially across Asia, the Middle East, and Europe, where there's clearer regulatory guidance, he adds.

Read Next: Circle CEO Jeremy Allaire Praises Hong Kong As The New Epicenter Of Crypto Focus

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