Prime Trust and most of its partners have gotten into unnecessary trouble.
Prime Trust subsidiary Banq has filed for Chapter 11 bankruptcy protection in the United States District Court of Nevada. like mentioned By The Block, the decision to file comes just five days after the parent company reached an acquisition deal with BitGo due to its issues with the Celsius cryptocurrency exchange network.
Based on the filing, Banq currently has approximately $17.72 million in assets and $5.4 million in total liabilities.
According to its official website, Banq was created about three years ago as a platform that provides mobile SDKs (Software Development Kits) on top of Prime Trust APIs for easy integration of all crypto and fiat finance services. Contributing to its current predicament is the fact that former employees of the foundation disposed of assets worth about $17.5 million without permission. These assets include trade secrets and confidential information and technology.
Ultimately, these assets were transferred to Fortress NFT Group, a company owned by Scott Purcell, the former CEO of Banq.
In response, Banq accused Fortress NFT Group of stealing trade secrets to create two non-fungible token (NFT) platforms: Planet NFT and Fortress NFT. Purcell tried to pivot Banq towards NFT, but when the latter refused, the former CEO sold the company’s infrastructure, computers, and intellectual property to Banq for his newly launched project, Fortress NFT.
In addition, the lawsuit stated that their theft of Banq’s corporate assets included taking the company’s seat licenses for Las Vegas Raiders games at Allegiant Stadium. All of this was done without the consent or knowledge of the Board of Directors. “Specifically, Defendant Purcell transferred the licenses for seats held by Bank of America to himself.”
It should be noted that Purcell founded the Fortress NFT Group with the former CTO and COO of Banq Bank.
Bank Insolvency: Challenges Facing Major Trust Entities
Recently, Prime Trust and most of its partners have been in needless trouble. Yesterday, Haru Invest, a South Korean cryptocurrency earnings company serviced by Prime Trust, suspended deposit and withdrawal requests until further notice.
Although the company did not initially share comprehensive details about the suspension, Haru Invest stated, “We recently encountered a specific issue with one of the service partners we worked with. We are now in the process of investigating the issue with them and are seeking to put in place a contingency plan to rectify the situation.”
Later, an update was released letting the public know that the company had launched an investigation and “discovered through our internal inspection process that certain information provided by the cargo operator is suspected to be false.” Haru Invest has made no effort to name this operator as Banq or Prime Trust, however, there are suspicions that it might be.
Also, TrueUSD, which has a banking relationship with Banq’s parent Prime Trust, decided to stop and refund its stablecoin, attributing the decision to “Prime Trust’s bandwidth issues.”
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Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about real-world applications of blockchain technology and innovations to drive public acceptance and global integration of the emerging technology. His desires to educate people about cryptocurrencies have inspired his contributions to popular blockchain-based media and websites. Benjamin Godfrey is a fan of sports and farming.