Shortly after the custodian Bitgo announced its acquisition of the company Prime Trust, its payments subsidiary, a firm called Banq, filed for Chapter 11 bankruptcy protection in the United States. According to court documents, the filing reveals that Banq listed approximately $17.725 million in assets and around $5.4 billion in liabilities.
Banq’s Bankruptcy Filing Exposes ‘Unauthorized Transfer’
On June 13, 2023, court documents revealed that Banq Incorporated, a subsidiary of the custodian Prime Trust, filed for Chapter 11 bankruptcy. The Chapter 11 filing, registered in Nevada, discloses that the company listed a total of $17.725 million in assets and $5.4 million in liabilities. However, the filing also reveals that assets worth $17.5 million were transferred to Fortress NFT Group, marked as an “unauthorized transfer.”
Fortress Trust, a new custodian startup founded by three members of the Banq/Prime Trust team, has gained traction among firms such as Swan Bitcoin, which has transitioned from Prime Trust to Fortress Trust in recent times. The announcement comes in the wake of Bitgo’s planned acquisition of Prime Trust, following the signing of a letter expressing its intent to purchase the custodian.
Prior to Bitgo’s letter of intent, rumors and speculation about Prime Trust facing financial difficulties circulated on social media platforms. Bitgo stated that the company would leverage Prime Trust’s infrastructure, exchange network, and crypto-centric IRA, expecting to derive significant benefits from these assets.
Prime Trust also collaborates with the team responsible for the stablecoin TUSD. On June 10, 2023, the stablecoin issuer announced that “TUSD mints via Prime Trust are paused for further notification.” However, three days later, on June 13, TUSD stated that it was actively working to resume mining operations with the crypto custodian. “We, the TUSD team, are diligently working towards resuming TUSD minting on Prime Trust. We understand the importance of providing a seamless experience for our users,” the TUSD team emphasized.
What are your thoughts on the implications of Banq’s bankruptcy filing and the unauthorized asset transfer? Share your thoughts and opinions about this subject in the comments section below.