Dear iTrustCapital Community:
As CEO of iTrustCapital, my top priorities include protecting client assets, providing excellent client service, and improving transparency and trust in the crypto arena. As a former Compliance Officer and Registered Principal at PIMCO, one of the world’s largest asset management firms ($1.8T AUM), I learned to understand and appreciate the positive impact a solid compliance program and necessary regulations have on financial markets. The compliance knowledge and regulatory experience I gained early in my career influenced my own set of beliefs and has led me to this critical role at iTrustCapital. Transparency, trust, and integrity comprises the very foundation from which we built this company. Compliance is literally in our DNA and doing the right thing is just what we do. Everyday.
Fear, greed, and stupidity are the primary drivers behind the downfall of numerous cryptocurrency firms over the last year. A vast majority of these collapses could have been avoided had there been a stronger emphasis on compliance and transparency in the sector; both key elements required for building and re-building client confidence and trust in the marketplace.
As you may be aware from recent news regarding Prime Trust, the Nevada Financial Institutions Division submitted a filing calling for a freeze on all Prime Trust’s business activities as a consequence of significant debt and the loss of customer assets. We want to reiterate that iTrustCapital does not work with Prime Trust and iTrustCapital was not affected by the unfortunate news.
There have been questions expressed by some about Prime Trust and its affiliation with Scott Purcell, former CEO of PrimeTrust (2017-2020), along with other members of his team who worked at that firm years ago, and their affiliation with our current qualified custodian. As a company, we take immense pride in our rigorous due diligence process, a commitment that has led us to abstain from engaging with several companies and products. This has, at times, upset some of our clients when we declined to offer options such as crypto lending, LUNA, and more. In this instance we believe there are several facts that need to be considered before forming an opinion.
- Purcell and members of his executive team departed from Prime Trust 2 years ago, according to public announcements listed here and here.
- The State of Nevada petition for bankruptcy specifically states that in 2020 “Prime came under new management” and later goes on to mention that “prior management” handed over the reins in good shape.
- The new management team at Prime Trust then proceeded to accept deposits into proprietary legacy or “inactive” wallets (not utilizing a Fireblocks wallet per this direct response from Fireblocks), and then waited nearly a full year to test withdrawals from the inactive or defunct wallets.
- Purcell is not CEO of Fortress Trust. Albert Forkner is the CEO of Fortress Trust and a former banking commissioner from the State of Wyoming. The Prime Trust management team and the CEO who took over for Purcell and his executive team were removed in late 2022.
- Prime Trust secured more than $160 million in new capital from major venture capital investors after Purcell departed from Prime Trust, including +$100 million raised just one year ago (July 1, 2022). From our experience it’s very difficult to secure that kind of capital from smart institutional investors without a very deep dive into the due diligence.
- Several venture capital investors who backed Purcell and team at Prime Trust, also backed them at Banq, and Fortress Trust. And continue to re-invest into Purcell and his team at Fortress Trust. I met with these investors face to face in Austin last week and they continue to stand by Purcell and the Fortress team.
- Many notable clients from Prime Trust followed Purcell and the team to Fortress Trust.
- At iTrustCapital, we have an internal team of operations experts who work closely with Fortress Trust, our Qualified Custodian, on a daily basis carefully tracking and reconciling all client deposits, withdrawals and digital asset transactions.
- Fortress utilizes BitGo and Fireblocks, both leaders in providing institutional grade digital asset wallet technology. Highlights include:
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- Multi-Party Computation (MPC)
- Offline Cold Storage
- Regular security and financial audits by external firms and have been awarded SOC 2 Type II certifications
- Commercial Crime Insurance Policies
Over the last year, iTrustCapital conducted a rigorous due-diligence process and reviewed nearly a dozen potential custodian partners prior to establishing our partnership with Fortress Trust.
However, most of these companies did not meet our expectations and infrastructure priorities with client asset security and operational transparency.
What stood out from Fortress Trust compared to the other custodians?
Led by a team of former banking commissioners, Fortress Trust demonstrated deep expertise in the IRA Trust Services field with an exceptional level of transparency when responding to multiple rounds of due diligence inquiries and several on-site visits.
Armed with a new Trust Charter and a robust technological infrastructure combined with a strong commitment to banking regulations and compliance audits, their team exemplified operational reliability and the capability to deliver outstanding services and technology support.
Fortress does not maintain any proprietary or legacy key management systems but rather works with industry leading partners such as Fireblocks and Bitgo in order to properly secure keys. In the event of a catastrophic breakdown in either vendor, Fortress maintains key recovery materials in geographically distributed locations that can be used to recover assets directly.
iTrustCapital possesses observation rights on the board of directors at Fortress Trust, granting us complete visibility into their business operations, financial and regulatory audits, and decision-making processes.
It's crucial to emphasize that we do not exercise control over or custody client assets, nor does iTrustCapital execute transactions on behalf of clients. Instead, we maintain accurate information about the assets while prioritizing security through daily interactions with the Fortress Trust operations team.
Fortress’s strict adherence to Nevada state and regulatory laws prohibits anyone from commingling, lending, or re-hypothecating client funds. Furthermore, all client assets are securely held off-balance sheet, in bankruptcy remote accounts, ensuring that client funds are never put at risk for speculative business endeavors.
What’s on the horizon for iTrustCapital?
Looking ahead, our commitment to maintaining safety, security, and peace of mind is unwavering. We understand that transparency and trust is the cornerstone of our relationship with you, our valued clients. As we continue our journey, we will prioritize open communication, not only with you but also with any of our third party service providers to ensure that your assets are protected.
Your trust and confidence in iTrustCapital are essential to us, and we will work tirelessly to earn and preserve it. Together, we will continue to forge a path forward with transparency, trust, and integrity at the core of everything we do.
Sincerely,
Kevin Maloney
Chief Executive Officer
DISCLAIMER
This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.
iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.
Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.
Some taxes and conditions may apply depending on the type of IRA account. Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional.
iTrustCapital makes no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) or omissions from the information contained herein. iTrustCapital disclaims any and all liability to any party for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this information, which is provided as is, without warranties.
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