Crypto custodian Prime Trust has filed for Chapter 11 bankruptcy protection in Delaware after facing a shortfall in customer funds.
The company said in its Aug. 15 filing that it has between 25,000 and 50,000 creditors with estimated liabilities between $100 million and $500 million compared to $50 million to $100 million worth of estimated assets. The company's top five unsecured creditors have claims of about $105 million, with the largest claim of $55 million.
Prior to Prime Trust's bankruptcy, Nevada business regulators issued a cease-and-desist order to the company on June 21, saying its financial condition was “critically deficient” and was unable to honor customer withdrawals. On June 26, Nevada's regulator petitioned a court to place the firm into receivership, which the court approved on July 18.
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