In a pause and desist declare, the Nevada Division of Trade and Trade’s Financial Institutions Division (FID) discovered that High Trust’s overall monetary condition had deteriorated to a critically deficient level.

The FID ordered High Trust to pause all actions that are in violation of Nevada regulations. The company has 30 days to petition for a hearing on the declare, after which this will be deemed closing.

“On or about June 21, 2023, Respondent used to be unable to honor buyer withdrawals as a result of a shortfall of buyer funds ended in by a critical liability on the Respondent’s balance sheet owed to clients,” wrote the Nevada regulator.

“Additionally, Respondent failed to safeguard sources below its custody and is unable to meet all buyer withdrawals.”

The regulator also claimed that High Trust is working with a stockholders fairness situation of detrimental $12 million, has failed to pay tax and successfully change into bancrupt.

A spokesperson for the Nevada FID advised CoinDesk that the pause and desist declare used to be issued on June 21. Rapidly after, crypto custody company BitGo announced that it can probably perchance perchance be terminating its acquisition of High Trust.

After substantial effort and work to search out a direction forward with High Trust, BitGo has made the laborious choice to total its acquisition of High Trust. This choice used to be not made frivolously and BitGo remains committed to our mission to inform belief in digital sources.

— BitGo (@BitGo) June 22, 2023

Shopping and selling platform Coinmetro and stablecoin anguish TrueUSD, two companies that bid High Trust as their fee accomplice, reported that the company had suspended U.S. greenback deposits and withdrawals.

High Trust raised $64 million in Series A funding in 2021, followed by a $107 million Series B spherical in 2022. Since then, the firm has faced a series of challenges, shedding a Third of its personnel in January and its fee-processing subsidiary Banq submitting for economic kill closing week.