Prime Trust subsidiary Banq files for bankruptcy amid BitGo acquisition deal

The payments subsidiary of crypto custodian Prime Trust, Banq, filed for bankruptcy extortion successful the United States connected June 13, tribunal documents show..

The determination comes conscionable days aft wallet infrastructure supplier and integer plus custodian BitGo signed a non-binding missive of intent to get Prime Trust, which was announced connected June 8.

Banq’s bankruptcy filing listed $17.72 cardinal and liabilities of $5.4 cardinal and cited the “unauthorized transfer” of $17.5 cardinal successful assets to Fortress NFT Group arsenic good arsenic the illicit transmission of commercialized secrets and proprietary accusation to Fortress.

Excerpt from Banq's bankruptcy filing detailing summary of assets and liabilities.  

Fortress NFT Group was acceptable up by Banq’s erstwhile CEO, CTO and CPO, reports say, and Banq is presently successful arbitration with Fortress NFT Group implicit these allegations.

The timing of the filing, conscionable aft the BitGo acquisition woody of Banq’s genitor Prime Trust was announced, raises questions astir however it mightiness impact the agreement.

While the presumption of the woody were not disclosed, if it goes through, BitGo volition get Prime Trust’s outgo rails and cryptocurrency IRA money and summation its wealthiness absorption offerings.

Prime Trust’s Nevada Trust Company volition besides articulation BitGo’s web of regulated spot companies successful South Dakota, New York, Germany, and Switzerland. Prime Trust’s API infrastructure and speech web volition “map implicit 1:1” with BitGo services. BitGo stated:

“This acquisition makes BitGo the archetypal planetary integer plus institution to supply a afloat suite of solutions for institutions and fintech platforms.”

The crypto custody marketplace is evolving rapidly, with caller deals including Ripples acquisition of Swiss integer plus custody supplier Metaco successful May for $250 million.

The BitGo/Prime Trust deal, if it goes ahead, comes conscionable arsenic the United States Securities and Exchange Commission has projected regularisation changes that would marque it harder for crypto companies to enactment arsenic custodians of their customers’ funds.

Related: Prometheum subsidiary receives FINRA support for integer plus qualified custody

Prime Trust has been nether unit for a while, having reportedly laid disconnected a 3rd of its staff successful January. Later, it stepped successful to hold Binance.US lawsuit funds done a web of spouse banks aft the banking situation successful March.

It was the center of a ungraded in the U.S. authorities of Oregon past twelvemonth erstwhile it was identified arsenic the root of a $500,000 publication to the authorities Democratic Party that aboriginal turned retired to person travel from FTX enforcement Nishad Singh.

BitGo itself was adjacent to being acquired by Galaxy Digital for $1.2 cardinal past twelvemonth and sued Galaxy for acquisition breach aft the woody was canceled.

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