Prime Trust subsidiary Banq files for bankruptcy amid BitGo acquisition deal
The payments subsidiary of crypto custodian Prime Trust, Banq, filed for bankruptcy protection in the United States on June 13, court documents show..
The move comes just days after wallet infrastructure provider and digital asset custodian BitGo signed a non-binding letter of intent to acquire Prime Trust, which was announced on June 8.
Banq’s bankruptcy filing listed $17.72 million and liabilities of $5.4 million and cited the “unauthorized transfer” of $17.5 million in assets to Fortress NFT Group as well as the illicit transmission of trade secrets and proprietary information to Fortress.
Fortress NFT Group was set up by Banq’s former CEO, CTO and CPO, reports say, and Banq is currently in arbitration with Fortress NFT Group over these allegations.
The timing of the filing, just after the BitGo acquisition deal of Banq’s parent Prime Trust was announced, raises questions about how it might affect the agreement.
While the terms of the deal were not disclosed, if it goes through, BitGo will acquire Prime Trust’s payment rails and cryptocurrency IRA fund and increase its wealth management offerings.
Prime Trust’s Nevada Trust Company will also join BitGo’s network of regulated trust companies in South Dakota, New York, Germany, and Switzerland. Prime Trust’s API infrastructure and exchange network will “map over 1:1” with BitGo services. BitGo stated:
The crypto custody market is evolving rapidly, with recent deals including Ripples acquisition of Swiss digital asset custody provider Metaco in May for $250 million.
The BitGo/Prime Trust deal, if it goes ahead, comes just as the United States Securities and Exchange Commission has proposed rule changes that would make it harder for crypto companies to act as custodians of their
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