This Protos article does a nice job of connecting the dots between Prime Trust's failure (2023) and Fortress Trust's collapse here in 2025. When Prime Trust went down, I remember digging in to the people behind it a little and finding it strange that they more or less just moved on to creating another custodian. Keep in mind that both Prime and Fortress kyc'd and supposedly followed the laws (until it came out that they were defrauding everyone). Regulations don't make custodians safer.
Prime Trust filed for Chapter 11 bankruptcy in August 2023 after its Banq subsidiary collapsed and Nevada’s Financial Institutions Division revealed that it had improperly utilized customers’ funds to cover others’ withdrawals.The former president of the Bank of Nevada had to step in as receiver.Regulators revealed Prime Trust’s staggering obligations as of June 26, 2023: $85.6 million in cash obligations against just $2.9 million in cash.They also revealed Prime Trust’s alleged loss of crypto wallet keys in December 2021 that it had hidden from public view for years.
Both Prime Trust and Fortress Trust collapsed under similar circumstances: Failure to properly safeguard customer assets, inability to meet customer withdrawals, and critical shortfalls between liabilities and funds that are hidden from public view for months or more.Both companies were Nevada-chartered companies that served the crypto industry, and both failures resulted in Nevada regulatory intervention citing unsound business practices.The two failures, sharing the same founder, reiterate the risks of centralized custodians generally and Purcell in particular.