Crypto News, Las Vegas crypto custodian, Prime Trust, has filed for Chapter 11 bankruptcy following its placement into receivership by Nevada regulators.
Prime Trust Bankruptcy: A Synopsis
The company’s financial challenges peaked this year, especially after losing access to certain customer cryptocurrency wallets since December 2021.
Deal Fallouts and Mismanagement
BitGo, another crypto custodian, abruptly backed out of its intent to acquire Prime Trust. Concurrently, Prime Trust’s subsidiary, Banq, declared bankruptcy due to alleged mismanagement, while partner Abra faced legal troubles over securities fraud.
Financial Pitfalls
Regulatory filings showed Prime Trust owed over $82 million to customers, with a significant portion tied up in an illiquid token, not Bitcoin. This caused panic among other crypto firms storing funds with Prime Trust.
A Summary of Future Predictions
Prime Trust aims to restructure, possibly even sell its assets. However, given its tumultuous past year, attracting potential buyers might be challenging. Despite its initial promise and accolades, including recognition by Fo, The investors and the crypto world is now seems to be staring at a dying project.
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