Prime Trust & the Risk of Bitcoin Custodians with Alex Leishman - WBD687

Alex Leishman is a Founder, CEO, & CTO of River
Financial. In this interview, we discuss the case of Prime
Trust, a crypto infrastructure company, that’s been placed
into receivership following key management errors that
resulted in it losing customer funds. We talk about the
challenges of asset custody in the Bitcoin industry and the
benefits and complexities of building a regulated business.


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Key management is the Achilles' heel for most Bitcoiners.
We all know the importance of having a diligent process for
safeguarding seed phrases, and yet, many people have
experienced material loss as a result of losing access to
keys. Currently, around 4 million Bitcoin, over 20% of the
available supply, are estimated to have been lost. The
concerning thing is that this isn’t just a result of
individuals making errors: there are businesses that are
also culpable.


Prime Trust is a crypto services company that provided APIs
and plug and play widgets for digital asset companies
seeking backend infrastructure. A court in Nevada has just
placed it in receivership citing operational instability
and insolvency risks. The root issue is that Prime Trust
accidentally lost access to wallets containing tens of
millions of dollars in assets. Not your keys not your coins
for the millionth time.


Custody is hard. But, it’s the same old basic lessons that
underpin sound custody solutions. Avoid complexity. Have
robust processes. Think about the long term rather than
taking expeditious shortcuts. Target self-custody. However,
these are lessons that are somewhat alien to the fiat
ideology of “move fast and break things”. The community,
therefore, needs to educate the new investor class that
will be attracted to Bitcoin in the next bull market.


 


This episode’s sponsors:


Iris Energy - Bitcoin Mining. Done Sustainably
Ledn - Financial services for Bitcoin hodlers
Bitcasino - The Future of Gaming is here
Ledger - State of the art Bitcoin hardware wallet
Wasabi Wallet - Privacy by default
Unchained - Secure your bitcoin with confidence