- Prime Trust partner TrueUSD paused stablecoin mints
- Former Banq CEO took over $17.5m in company assets illegally
Prime Trust subsidiary Banq filed for insolvency in a Nevada bankruptcy court as Prime Trust partner TrueUSD paused stablecoin mints. According to the bankruptcy filing, Banq has around $18 million in assets and $5 million in liabilities.
Prime Trust, a struggling crypto custodian, is working on an acquisition agreement with BitGo after facing a liquidity crisis due to Celsius’ insolvency, CoinDesk wrote.
TrueUSD stops mints due to Prime bandwidth issues
Stablecoin issuer TrueUSD has paused minting and redemptions due to Prime Trust’s bandwidth problems. The company had a banking relationship with Prime Trust.
Haru Invest, a crypto yield firm based in South Korea, has also suspended related operations involving a problematic service provider, believed to be either Prime Trust or its insolvent subsidiary.
Unauthorized transfer of assets worth millions
Banq’s bankruptcy is partly due to an incident, in which former employees took over $17.5 million in assets without authorization. The assets included commercial secrets and classified information and technology and were transferred to Fortress NFT Group, a company founded by Scott Purcell, Banq’s former CEO.
Banq filed a lawsuit against Fortress NFT Group for allegedly stealing trade secrets to found Planet NFT and Fortress NFT, two rival NFT platforms. They also accused Fortress of carrying out fraudulent activities to conceal its misconduct.
Banq alleged in the lawsuit that Purcell tried to turn Banq towards NFTs. After meeting with resistance from Banq’s Board of Directors and shareholders, Purcell launched Fortress NFT and then sold Banq’s corporate infrastructure, computers, and intellectual property to it.
The lawsuit states that their “theft of Banq’s corporate assets” included taking the company’s seat licenses for Las Vegas Raiders’ games at Allegiant Stadium without Board approval or knowledge. Specifically, Purcell transferred the seat licenses owned by Banq to himself.
At the beginning of the year, a judge ordered arbitration of the case as Purcell and co-defendants signed mediation clauses.
