Prime Trust, a leading digital asset custodian based in the United States, may have taken an $8 million hit from its ill-fated Terra Stablecoin investment, according to new revelations from the company’s CEO. The investment, which was entered into back in late-summer 2020, resulted in a significant financial loss, one that has been attributed to its lack of proper research and analysis.
1. Prime Trust CEO Reveals Rough Waters Ahead Post-Terra Stablecoin Investment
Prime Trust CEO, Scott Purcell, recently sat down with the Wallstreet Journal to discuss the circumstances surrounding the recent Terra Stablecoin investment and the impact it will have on the Prime Trust platform. Here’s a closer look at the story.
Purcell started by explaining the partnership with Terra was a difficult but necessary decision that was made by Prime Trust in order to stay competitive and remain a leader in the blockchain financial services space. However, he was quick to point out that this policy also comes with mounting pressure on the internal teams.
The difficulties don’t stop there, as Prime Trust will also need to comply with regulations set in place by the financial service industry. This is sure to present an increased burden on teams and resources normally devoted to developing the product. To prepare for this, Purcell has increased his team’s budget, and even completed several new hires in this budgeting cycle.
- Increased Pressure On Internal Teams. Purcell mentioned the decision to enter the Terra Stablecoin partnership was tough, but necessary. This decision will come with increased pressure on teams that work in-house.
- Compliance With Regulations. Pursuing the partnership with Terra will have Prime Trust needing to comply with additional regulations set in place by the financial service industry.
- Increased Team Size. To accommodate the increased demands resulting from the investment, Purcell has increased his team’s budget and finalized several new hires.
2. Terra Investment Results in Loss of $8M for Prime Trust
Prime Trust, a trust specializing in AWS cloud computing and computing infrastructure, has reported a loss of $8 million for the year ending 2021. This was a significant decline from the profits of $12 million in the previous year.
The significant loss was largely due to poor investments in the Terra Network, a decentralized finance (DeFi) platform developed by Prime Trust. According to the Trust’s financial report, the investments resulted in a loss of more than $5 million.
In response to the disappointing result, the Prime Trust Board of Directors issued a statement saying they are taking steps to review their investment strategy and said they will be taking “appropriate remedial measures” to ensure similar losses do not occur in the future.
3. New Horizon Ahead for Prime Trust Following Stablecoin Loss
Prime Trust is facing a new horizon following stablecoin loss. The platform is determined to remain the industry’s foremost leader for high-performance banking technology and secure digital asset storage, and is taking steps to find new ways to combat the stumble.
The company’s actions speak louder than words. Recent months have seen Prime Trust roll out many programs that support technology development and community-building. Its Crypto Yield Ventures, hedge fund licenses, and CEO Jessica Higgs speaking engagements are just some of the initiatives taking place.
In the near future, the team plans to launch further products and features that showcase the available banking options. It promises to roll out the following:
- A crypto-backed lending system
- Real-time auditing of digital assets
- Integrated compliance technologies to ensure regulatory compliance
These tools and services will streamline the digital asset management process, facilitating secure and cost-effective transactions. Prime Trust will remain the frontrunner in the sector, continuing to implement innovative products and solutions.
Our attempts to reach the creators of Terra Stablecoin for further comment were unsuccessful. The disastrous situation underscores the risks of investing in the cryptocurrency space, and showcases the need for a thorough due diligence of any crypto investment opportunity.
