Bitcoin Savings App Coinbits Caught in Prime Trust Fallout

Coinbits, a Bitcoin dollar-cost averaging (DCA) app that also has been sponsoring multiple Bitcoin shows and podcasts, has been forced to halt most of its features due to exposure to Prime Trust.

Bitcoin Savings App Coinbits Caught in Prime Trust Fallout
  • "This is thread that we would never have wanted to write. We’ve been posting updates on our website and in email, but we think it’s important to communicate directly to Bitcoin Twitter about what the Prime Trust meltdown means for Coinbits," said the company's Twitter account.
  • "There are still many unknowns, but we intend to fight for our members that have funds locked up with Prime Trust."
"The petition from the Nevada Department of Business and Industry seems to indicate that Prime Trust still has enough bitcoin to honor our members’ balances. We are pursuing these assets on behalf of our members."
  • "Most of the features of Coinbits App are currently offline, but we are developing new solutions and intend to restore our services soon."
  • "Does Coinbits have a future? Hell, yeah. We have a lot of exciting ideas that will focus even more on self custody and independence. However, we'll save details for a future thread."

It's unclear what other companies have been affected by the Prime Trust debacle. Some of the companies that issued statements and clarifications include:

  • Bitcoin onramp Swan reportedly changed custodians to Fortress and BitGo back in May.
  • Payments startup Strike said it moved to its own infrastructure earlier this month.
  • Bitcoin rewards company Fold announced upgrades to its custodial strategy on June 22, 2023. The company temporarily paused Bitcoin buying, but withdrawals are still available.
  • Stablecoin issuers TrueUSD (TUSD) claimed to have zero exposure to Prime Trust.
  • Cryptocurrency exchange OKCoin might have some exposure to Prime Trust, although the scope of it is not clear and there are no confirmed reports yet.

Meanwhile, Fireblocks, a custodian used by Prime Trust, issued a clarification stating that "no customer loss occurred at Prime Trust as a result of their use of Fireblocks wallets."

"Pages 5-6 of the petition clearly allege that after Prime Trust became a Fireblocks customer, new management made a decision to deposit Prime Trust’s customer assets in old legacy wallets. Once management moved those assets to the legacy wallets, the customer assets were not recoverable. These legacy wallets are not Fireblocks wallets."

Coinbits Post / Archive
Fireblocks Post / Archive
Fold Announcement / Archive