Prime Trust Files for Bankruptcy: Details
- Crypto custodian Prime Trust filed for bankruptcy in a Delaware court on August 15.
- The firm has around 25K to 50K creditors, along with $100M to $500M in estimated liabilities.
- The estimated assets belonging to the firm are around $50M to $100M.
- The firm stated it will file motions to include requests to continue to pay wages and benefits to employees.
The crypto industry is still trying to recover from the effects of the 2022 crypto winter, which witnessed the collapse of some of the largest crypto businesses. Crypto custodian Prime Trust, which was founded in 2016, has announced that it is filing for Chapter 11 bankruptcy, joining the list of firms like Celsius Network, FTX crypto exchange, and Voyager Digital.
The crypto custodian filed for bankruptcy in a Delaware court after facing a shortfall in customer funds. Interestingly, Prime Trust noted in an August 15 filing that it has around 25,000 to 50,000 creditors and estimated liabilities between $100 million and $500 million, compared to $50 million and $100 million worth of estimated assets.
“The Company intends to file a number of motions with the Bankruptcy Court designed to facilitate the Company’s orderly evaluation of all strategic alternatives, including potentially a sale of the Company’s assets and operations,” Prime Trust stated in a press release.
On the other hand, Prime Trust said that it will also file motions to include requests to continue to pay wages and benefits to employees. Moreover, the firm’s top five creditors have claims of roughly $105 million, with the highest being $55 million. More importantly, Prime Core Technologies Inc., Prime Trust, LLC, Prime IRA LLC, and Prime Digital LLC were all mentioned in the bankruptcy filing.
As reported earlier by Bitnation, crypto custodian BitGo confirmed its intentions to acquire a fintech infrastructure provider in June, but it is clear that the deal fell through. Moreover, BitGo confirmed that it had signed a term sheet with the parent company of the troubled crypto custodian.
Further, the Nevada Financial Institutions Division filed a petition to place Prime Trust in receivership in late June. The regulator issued a cease-and-desist order against the crypto custodian on June 21. The petition stated that the crypto custodian is “operating in an unsafe and unsound manner.”
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
