The crypto custodian Prime Trust filed a petition for bankruptcy under Chapter 11 of the United States Code in a Delaware court.
According to the filing, the platform has between 25,000 and 50,000 creditors. Its liabilities are estimated at $100-500 million with assets of $50-100 million.
The five largest creditors have claims totaling about $105 million, including the largest claim of $55 million.
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\u201cThe company intends to file a number of petitions in bankruptcy court to facilitate an orderly assessment of all strategic alternatives, including a possible sale of assets and operations,\u201d the accompanying press release said.\u201d
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Prime Core Technologies Inc., Prime Trust, LLC, Prime IRA LLC and Prime Digital LLC were named as petitioning organizations.
In June, the Nevada Department of Business and Industry ordered Prime Trust to freeze deposits and withdrawals. The regulator cited a \”capital shortfall,\” which prevented the firm from fully meeting customers\’ requests to withdraw assets.
Subsequently the department filed a petition to bar the crypto custodian from any business operations. In July the court ordered the company to commence bankruptcy proceedings and appointed a trustee, John Gedri, the president of Bank of Nevada.
Additionally, the Department of Business and Industry filed a bid to acquire the organization and freeze all of its enterprises. The document was filed a few hours after BitGo withdrew from the deal to acquire the crypto custodian.
Banq, a payments company linked to Prime Trust, also filed for bankruptcy.