Prime Trust’s Banq Files For Bankruptcy After Former Officers Steal $17.5 Million
In a major development within the cryptocurrency industry, Banq, a subsidiary of the embattled crypto custodian Prime Trust, has filed for bankruptcy in a U.S. bankruptcy court located in the district of Nevada. The filing highlights approximately $17.72 million in assets against $5.4 million in liabilities.
This bankruptcy filing follows Prime Trust’s ongoing efforts to finalize an acquisition deal with BitGo, which became necessary due to a financial crisis stemming from the Celsius bankruptcy. As the parent company grapples with its own challenges, Banq finds itself entangled in a web of complications.
TrueUSD, a stablecoin with a banking relationship with Prime Trust, recently announced a temporary halt to stablecoin mints and redemptions, citing “Prime Trust’s bandwidth issues” as the cause.
Meanwhile, South Korean crypto yield firm Haru Invest also faced operational disruptions, citing difficulties with an unnamed service provider, potentially linked to Banq or Prime Trust.
Moreover, the bankruptcy filing reveals that Banq alleges an “unauthorized transfer” of $17.5 million in assets by former officers, who reportedly absconded with trade secrets, proprietary information, and technology, directing them to Fortress NFT Group.
The very founders of Banq, including the former CEO, CTO, and CPO, established Fortress NFT Group, which now faces a lawsuit from Banq. The suit alleges that the trio stole trade secret information to launch rival NFT platforms, Fortress NFT and Planet NFT, while engaging in fraudulent activities to conceal their actions.
According to Banq’s lawsuit, former CEO Scott Purcell attempted to shift Banq’s focus toward NFTs, but facing resistance from the board and shareholders, he founded Fortress NFT.
“Their theft of Banq’s corporate assets even included taking the company’s seat licenses for Las Vegas Raiders’ games at Allegiant Stadium, all without Board approval or knowledge. Specifically, Defendant Purcell transferred the seat licenses owned by Banq to himself,” the suit read.
In early 2023, a judge ruled for the case to proceed to arbitration, as Purcell and the other defendants in the case had signed arbitration clauses, marking a new chapter in this convoluted legal battle.
Information for this briefing was found via CoinDesk and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
