How Prime Trust protects your assets in MyConstant
In our first guest blog, Scott Purcell explains how Prime Trust protects MyConstant’s USD reserve.
I’m Scott Purcell, CEO and Chief Trust Officer at Prime Trust.
We play a big role in guaranteeing MyConstant’s value and security, so I thought you might want to know a little more about us and what we do.
First of all, let me explain what Prime Trust is.
Prime Trust is a trust company. We hold and protect people’s cash and non-cash assets, whether they be stocks, bonds, cryptocurrencies, tokens, real estate, or private business ownership interests.
Why use a trust company?
Many reasons — usually when you need a regulated financial institution to protect your money, or when circumstances make holding and organizing them inconvenient to do yourself.
You might also want to hold a variety of different assets “on a single statement” to keep them organized, or you might want to protect them from loss, or need an independent trustee to avoid conflict with others (such as in the splitting of an estate in probate).
For MyConstant, Prime Trust is the regulated, expert, neutral trustee of the USD reserve.
We comply with the rules, administer the paperwork, and make the necessary tax filings so MyConstant can focus on giving you the fastest, most efficient digital currency in the world.
The MyConstant Foundation, issuer of the MyConstant stablecoin, never touches the USD reserve. It can’t. The USD is held in trust by Prime Trust for the exclusive benefit of token holders, which makes it easy to exchange MyConstant back into USD through the trustee (Prime Trust) whenever you want.
And since we’re the trustee of the reserve, and therefore MyConstant can’t touch the funds, you never need worry about MyConstant running off with your money or falling foul of financial regulations that could shut MyConstant down.
Prime Trust is a chartered, regulated trust company that is overseen by the Nevada Financial Institutions Division. As a “BSA-subject” financial institution, we perform Know Your Customer (KYC) checks on everyone who creates or cashes out MyConstant to keep the MyConstant network in compliance with FinCEN and other regulations.
How does this work, behind the scenes?
Once we’ve performed KYC and completed AML (Anti-Money Laundering compliance), everything that happens on the blockchain is managed by a smart contract. A smart contract is a piece of code on the Ethereum blockchain. When certain conditions are met, the smart contract performs an action.
The great thing about smart contracts is that they’re completely automatic, saving time, money, and avoiding human error. And because they’re built upon blockchain technology, they’re extremely difficult to hack.
Here’s how the MyConstant smart contract works.
When you exchange fiat money for MyConstant, that fiat money comes straight through to to the trust that we oversee. MyConstant, the company, never touches it. Once we’ve received your money and completed AML, we notify the smart contract and it creates new MyConstant tokens and sends them according to your instructions, usually to your account at Prime Trust or your crypto wallet.
Likewise, when you exchange MyConstant for fiat money, the smart contract destroys your MyConstant, and at the same time, tells us to release the equivalent fiat money to your bank account. Now, this isn’t an entirely trustless system. While the smart contract means you don’t have to trust MyConstant, you do have to trust us. However, as an accredited and regulated financial institution, the money you send us in exchange for MyConstant is FDIC (Federal Deposit Insurance Corporation) insured to $130,000,000, thanks to the syndication of banks we work with (each capable of independently providing $250,000 in direct FDIC coverage).
So, in the extremely unlikely scenario where Prime Trust funds were lost or stolen, the US government guarantees you don’t lose out (up to the cumulative FDIC insurance limits). Unless you’re currently holding (or plan to hold) more than this amount as MyConstant, there’s very little to worry about.
Well, that just about sums us up. I hope you’ve found it useful. If you’d like to know more about us, please visit our website where you’ll find a treasure trove of information on compliance, trusts, and our asset management system. In the meantime, remember that when you deposit funds on MyConstant, we’ve got your back.
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