Bitrabo Editorial
A subsidiary of Prime Trust, Banq, has filed for bankruptcy, highlighting the ongoing challenges faced by custodians in the crypto industry. This comes after Prime Trust faced a lawsuit in 2022 for allegedly withholding $17 million from Celsius.
Banq’s Bankruptcy Filing And Implications
On June 13, Banq filed for bankruptcy in the U.S. District Court of Nevada. Banq specializes in providing payment processing services tailored to cryptocurrency businesses.
In the bankruptcy filing, Banq disclosed its financial state, reporting $17.72 million in assets and $5.4 million in liabilities.
The timing of Banq’s bankruptcy filing is significant, as it occurred just days after BitGo acquired Prime Core Technologies, the parent company of Prime Trust. This raises uncertainties about Banq’s future prospects and its relationship with Prime Trust.
In the bankruptcy filing, Banq revealed that $17.5 million of its assets were “unauthorizedly transferred” to Fortress NFT Group, a company founded by Banq’s former CEO, CTO, and CPO. Banq has taken legal action against these former executives, accusing them of launching Fortress NFT using stolen trade secrets and engaging in fraudulent activities.
The matter is currently under arbitration, with proceedings still ongoing.
Implications For Crypto Custodians
Prime Trust has faced significant challenges, including the lawsuit from Celsius. Additionally, the temporary halt of TrueUSD (TUSD) minting on Prime Trust caused concerns among investors. However, TUSD quickly regained its pegged price, and the team behind the stablecoin reassured users that operations were running smoothly.
Overall, Banq’s bankruptcy filing and the controversies surrounding Prime Trust highlight the complexities and issues faced by custodians in the crypto industry.
Featured image from iStock, Charts from TradingView.com