Banq, a subsidiary of troubled crypto custodian Prime Trust, seeks refuge in bankruptcy court as financial woes mount.
The filing unveils assets of approximately $17.72 million pitted against liabilities of $5.4 million, casting a shadow over Prime Trust’s acquisition deal with BitGo amidst the aftermath of the Celsius bankruptcy.
The turmoil reverberates beyond Banq, as TrueUSD grapples with a halt in stablecoin mints and redemptions attributed to “Prime Trust’s bandwidth issues.” Meanwhile, South Korean crypto yield firm Haru Invest faces operational disruptions tied to a cryptic service provider, rumored to be Banq or Prime Trust.
Internally, Banq unearths alarming allegations of an “unauthorized transfer” orchestrated by former officers, siphoning off $17.5 million in assets to Fortress NFT Group.
The misappropriation includes coveted trade secrets, proprietary information, and cutting-edge technology, sparking a legal firestorm against the ex-CEO, CTO, and CPO accused of asset theft and launching competing NFT platforms.
Amidst the legal quagmire, the case takes an unexpected twist, as arbitration becomes the battleground for Banq and Fortress NFT Group following the defendants’ consent to arbitration clauses.
As Banq’s bankruptcy proceedings unfold, the industry stands as a vigilant spectator, gauging the ripple effect on Prime Trust and the wider crypto custodial landscape. This unfolding saga underscores the imperative for transparency and robust security measures in an ever-evolving digital asset realm.