The Eighth Judicial District Court of Nevada has ordered Prime Trust LLC into receivership amid allegations the custodian used customer funds to buy cryptocurrencies after losing access to digital wallets containing tens of millions of dollars in assets.

The court appointed receiver will take over the day-to-day operations of the Las Vegas-based company and determine the best option to protect clients, according to a statement Tuesday from the Nevada Financial Institutions Division. John Guedry, whose LinkedIn profile lists him as president of Bank of Nevada, has been appointed the receiver.

Prime Trust once played a significant role in the infrastructure of crypto markets, holding funds on behalf of companies like FTX, Binance.US and Celsius Network. Custodians typically hold dollars and digital assets on behalf of customers, putting the funds into the customers’ own accounts. the firms are meant to be among the safer parts of the financial system, not engaging in risky activities.

Around December 2021, Prime discovered that it was unable to access some of its wallets where it stored cryptocurrency, according to the Nevada petition filed in June. From December 2021 to March 2022, Prime purchased additional digital currency using customer money from its omnibus customer accounts to satisfy withdrawals, the filing said.

The company, which is a unit of Prime Core Technologies Inc., owed more than $85 million in fiat to clients but had less than $3 million, according to the petition. It was also short on digital assets owed to clients.

The receiver is not authorized to incur any expenses over $500,000 without an order from the court, according to Tuesday’s filing.

(Updates with information on the receiver, beginning in the second paragraph.)