Assets held on behalf of customers are ear-marked for each customer and protected. Prime Trust assets and our customer’s assets are either kept separate from the assets of other customers or are otherwise specifically identified as belonging to a particular customer, pursuant to NRS 669.220.1(a) and our internal processes including our ledgering system.
It is not possible for Prime Trust to opine on the specifics of how insolvency proceedings would unfold at this time given current precedent, especially with respect to digital assets. There are many unknowns in bankruptcy law regarding the way a custodian’s insolvency would apply to the assets the custodian holds (regardless of who is custodian). Historically, the goal of any insolvency proceeding has been to ensure that property/assets are returned to the rightful owner (the customers), especially when the assets of such customers are carefully kept in identifiable/traceable/segregated manner. Specifically, bankruptcy courts tend to apply applicable state trust and property laws, including those that honor a customer’s continuing right to their assets held in custody by another.