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10 sats \ 0 replies \ @tlindi 26 Jan 2023 freebie
"If it has Trust in its name - it's not worth of your trust." (C) anonymous
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26 sats \ 13 replies \ @PROTOPHREAK 26 Jan 2023
Any more details? Prime trust has also stopped supporting other states recently. I would love to learn what is happening at a state level to cause this.
Unlike other states, Texas is a BIG DEAL. No KYC ops or market making ops for that state is a death sentence for some businesses.
Many exchanges are entirely reliant on Prime Trust to operate at all and Texas is one of the biggest markets across the board for this stuff.
Even companies like Swan and Strike rely on Prime Trust for a lot of different things. I love both and really hope to see them navigate through this.
This is much more devastating than people realize. I would anticipate fallout or major changes in the way theses businesses operate in a very abrupt manner.
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10 sats \ 1 reply \ @TonyGiorgio 26 Jan 2023
I've gotten some emails from exchanges I forgot existed years ago that they were cutting off Texas last week. I wonder if they were using Prime Trust.
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0 sats \ 0 replies \ @PROTOPHREAK 27 Jan 2023
Most likely yes. Prime Trust is a single point of failure across the board, they are huge. They provide liquidity, custody, KYC and anti-fraud services so they are a whole workshop of tooling for Bitcoin or Crypto based startups.
I also suspect another reason Prime Trust is used is because they handle a good amount of licensing and legal issues state to state, which leads us to our current problem. Unless these exchanges have a money transmitter license or can switch out to a different provider (lmao) they have to shut down in the same regions as Prime Trust because they relied on Prime Trust's licensing to operate in that region in the first place.
So many companies are totally fucked.
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10 sats \ 10 replies \ @2big2fail 26 Jan 2023
i believe strike does not use prime trust
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81 sats \ 0 replies \ @PROTOPHREAK 26 Jan 2023
https://strike.me/faq/whatisstrike/
Strike uses Bitcoin technology to offer instant payments globally, with no added transaction fees. Use Strike to pay your friends, buy goods and services online, make micropayments, tip content creators, as well as buy and sell bitcoin.
To offer these services, we’ve partnered with Prime Trust, LLC, a state-regulated trust company, which holds your funds in custody and enables funds transfers. You can contact Prime Trust here.
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20 sats \ 2 replies \ @benthecarman 26 Jan 2023
they definitely do
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0 sats \ 1 reply \ @2big2fail 26 Jan 2023
https://mobile.twitter.com/Crynryan/status/1591300081822871552
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2 sats \ 0 replies \ @TonyGiorgio 27 Jan 2023
Liquidity provider != custody provider
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0 sats \ 5 replies \ @DiracDelta 26 Jan 2023
lmao, it's hilarious how people think they stopped using Prime Trust due to their verbiage around the massive fuck-up (which btw, they could have easily built internal tooling to prevent... and presumably still have not, so you are being extremely trustful that you are not getting screwed with them or Swan). Prime Trust got another liquidity provider, which then Strike effectively had access to. Your entire backend liquidity provider is not something you can change in a weekend, lol
https://bitcoinmagazine.com/markets/ftx-collapse-cause-huge-bitcoin-price-spike
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15 sats \ 4 replies \ @2big2fail 27 Jan 2023
why has strike not made an announcement about not being able to buy bitcoin in texas if they still use prime?
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0 sats \ 3 replies \ @PROTOPHREAK 27 Jan 2023
My guess is that will accelerate a spin down of what I suspect to be a large portion of their business. Prime Trust will work to offboard accounts so there is likely some sort of grace period. I would expect every second of that grace period to be milked by any company who is reliant on Texas to boost their customer base.
In any case they still have a few days to announce. May not need to give any advanced notice at all. Maybe they have some sort of ace in their pocket to keep operating in Texas. That is always possible. I am hopeful for that anyways.
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0 sats \ 2 replies \ @2big2fail 28 Jan 2023
strike has its own money transmitter license in texas.
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0 sats \ 0 replies \ @PROTOPHREAK 28 Jan 2023
Ok an update to my previous response. I looked into this a bit more and it is true that they have an MTL for Texas: https://strike.me/legal/licenses/
But it also lists they have an MTL for South Dakota, which they no longer operate in because Prime Trust is not currently operating in that state.
Could go so many directions so I guess we will have to wait and see.
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0 sats \ 0 replies \ @PROTOPHREAK 28 Jan 2023
That is good to know. I did not think to check but they probably list their licenses some where on their website. I am going to check Swan too but they probably have a license as well.
I can't imagine either are very happy with Prime Trust right now. Maybe they know the "why" behind it all though. Prime Trust does not explain it to sufficient understanding beyond "We pulled our license, will reapply ASAP".
Prime Trust honestly kind of sounds like a bit of a shit show of a company from what I am gathering.
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10 sats \ 1 reply \ @BusyBrain 26 Jan 2023
Prime Trust Support:
We withdrew our Money Transmitter License (MTL) application from Texas, and intend to swiftly reapply with the objective of obtaining a Money Transmitter License in the near future.
We will provide updates to our licensing here.
https://www.primetrust.com/legal/licenses-disclosures
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1 sat \ 0 replies \ @Brunswick 27 Jan 2023
Texas government is no different than any other government, don't fool yourself. What is different are the people of Texas. Most likely this prime trust problem is a dispute with department in Ausin.
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0 sats \ 0 replies \ @faithandcredit 27 Jan 2023
When are they going to deal with the shitcoins?
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0 sats \ 1 reply \ @TonyGiorgio 26 Jan 2023
I think it may be in order to change some terms or something? There's this language here that indicates they did this on purpose and is going to apply again. Only reason I can think is to change the conditions of their application. https://support.primetrust.com/hc/en-us/articles/12311927816987-Will-Prime-Trust-ever-return-to-Texas-
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0 sats \ 0 replies \ @PROTOPHREAK 27 Jan 2023
Yeah I saw that language. Even compared to the language from this: https://support.primetrust.com/hc/en-us/articles/8738244438299-South-Dakota-FAQs it is more hopeful.
But it isn't clear what the time frame of "swiftly" means. If it has no legal definition then that could still be years. If it is still what any normal human expects the word "swift" to mean then why does their FAQ state accounts will be closed, new accounts cannot be opened, etc?
Seems like that is pretty destructive because it still means exchanges will need to close down accounts. It seems like there would be a better way to do whatever they are trying to accomplish so I am suspicious of the language.
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0 sats \ 5 replies \ @siggy47 26 Jan 2023
Does anyone know why?
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0 sats \ 0 replies \ @BusyBrain 27 Jan 2023
Prime Trust Support:
We withdrew our Money Transmitter License (MTL) application from Texas, and intend to swiftly reapply with the objective of obtaining a Money Transmitter License in the near future.
We will provide updates to our licensing here.
https://www.primetrust.com/legal/licenses-disclosures
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0 sats \ 3 replies \ @DiracDelta 26 Jan 2023
probably state by state deposits, and them hurting for liquidity with their shitcoin revenue drying up... if they're losing states at this rate, who knows how long they'll survive. ZeroHash is the other big player, so perhaps as both lose shitcoin revenue, they will merge and provide an even worse, even less competitive offering!
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32 sats \ 0 replies \ @2big2fail 27 Jan 2023
https://mobile.twitter.com/Nunyabuis21mill/status/1618708409490239488/photo/1
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10 sats \ 1 reply \ @siggy47 26 Jan 2023
I admit I haven't done my homework on Prime Trust. I use Swan Bitcoin to dca, and I know Prime Trust is Swan's custodian until my deposits clear and I sweep my sats into cold storage. I trust Swan as much as any exchange in the industry, so I never questioned Prime Trust. Live and learn.
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20 sats \ 0 replies \ @PROTOPHREAK 27 Jan 2023
Yeah places like Swan are really awesome and provide a great service, I think. The problem is there are two major reasons companies use services like Prime Trust.
1.) Resources. They built up tooling and provide good starting point if you have minimal resources or capital as a startup.
2.) This one may be a bigger reason. Offloading these things to a provider also offloads legal responsibility for your business. Prime Trust is responsible for storing and securing that data. Should a breach happen Swan is not on the hook for it.
You should do your DD on Prime Trust though. They nearly have a monopoly.
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