Prime Core Technologies Inc. files for Chapter 11 bankruptcy protection in Delaware, according to a court filing. This led to customers leaving and “a precipitous decline in the Company’s revenues, and led to the issuance of the Cease and Desist Order,” the filing said. In 2018, Prime Core created cold storage wallets to oversee the storage of ether (ETH), bitcoin (BTC) and other “compliant” crypto tokens. But the brand’s 98f Legacy Wallet, used to store amounts of customer crypto, was able to be accessed by multiple signers — an evident security shortfall. Furthermore, Prime Trust’s recent filings brought to light its acquisition of Ethereum (ETH) assets, valued at approximately $76.4 million. The strategic intent and outcomes of this purchase are yet to be fully comprehended.

Crypto custodian Prime Trust files for bankruptcy in Delaware

• The precise implications of these outflows are still being examined, but the interplay between the company’s financial choices and market variances undeniably influenced its present financial state.
• Prime Trust said in its statement it believes Chapter 11 bankruptcy will provide a “transparent and value-maximizing process” for the benefit of its clients and stakeholders.
• Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized.
• Just recently, bitcoin-only exchanges Strike and Swan both announced that they would be moving away from custody through Prime Trust.

The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage. The unfolding scenario underscores the volatile nature of the cryptocurrency realm and the inherent risks businesses face when navigating this digital frontier. As Prime Core Technologies grapples with its financial challenges, the broader industry watches keenly, hoping to glean lessons for future endeavors. The committee will work with the company’s management team and creditors to develop a plan to restructure the company’s finances and emerge from Chapter 11 as a viable business.

• Despite its reputation, Prime Trust suffered a series of setbacks in recent months.
• First, it noted that Prime Trust’s Nevada Trust Company will join BitGo’s global network of regulated trust companies, which already includes entities in South Dakota, New York, Germany and Switzerland.
• In 2018, Prime Core created cold storage wallets to oversee the storage of ether (ETH), bitcoin (BTC) and other “compliant” crypto tokens.
• Roughly $76 million was spent on ETH to fund the customer withdrawals, the filing said.
• In a statement, Prime Trust Interim CEO Jor Law called the move “a significant enhancement for the industry.”
• Specifically, October and November reported steep net losses of $7.4 million and $8.4 million, in that order.

Prime Core fell victim to mismanagement, felt ‘ripple effect’ from crypto winter

As previously reported by Blockworks, Prime Trust attempted to quickly raise cash before announcing a deal with BitGo. Roughly $76 million was spent on ETH to fund the customer withdrawals, the filing said.

How can I avoid similar situations in the future?

Prime Trust had been the subject of some speculation with people online suggesting the firm was facing bankruptcy. Cryptocurrency custody firm BitGo has reached a preliminary agreement to buy Prime Trust, another crypto custody specialist regulated in the state of Nevada, according to two people familiar with the matter. This bankruptcy case information is provided for informational purposes only and does not constitute is the coinbase app safe to link with your bank account legal advice. All data is sourced from PACER (Public Access to Court Electronic Records) and other official federal court systems.

The company revealed it incurred losses of $6 million in client funds and $2 million in treasury funds through USTC investments under previous management. On December 21, 2023, the Bankruptcy Court confirmed the Debtors’ chapter 11 plan (the “Plan”). The Plan provides for an orderly liquidation of the Debtors’ assets by the Plan Administrator. Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad. The improper effort in accessing “wallet access devices” devolved into a number of employees tapping fiat currency from customer accounts, then using those funds to purchase ether to fulfill customer withdrawals, Law said.

For Customers

We check courts hourly for new events, update this case daily with email alerts, and give you an easy‑to‑use online platform to review the docket, purchase documents, and access your files from any device. Prime Core Technologies’ decision to channel investments into TerraUSD proved costly, exacerbating its pre-existing monetary challenges. On 15 August 2023, the company officially entered bankruptcy proceedings in the U.S., citing liabilities hovering between $100 million to $500 million and a creditor count ranging from 25,000 to 50,000. This move was further precipitated by a Nevada court’s intervention, which mandated the appointment of a receiver for Prime Trust to mitigate potential threats to users and the nascent cryptocurrency sector. These financial difficulties come in the wake of TerraUSD’s nosedive in May 2022, an event that many market analysts pinpoint as a significant catalyst for the widespread cryptocurrency market downturn last year. Renowned firms, including FTX, Three Arrows, BlockFi, and Voyager Digital, were not spared from the market turbulence, with many either shuttering their operations or initiating bankruptcy filings.

Purview Digital

Just recently, bitcoin-only exchanges Strike and Swan both announced that they would be moving away from custody through Prime Trust. Strike announced that it will be utilizing its own custody services, while Swan is moving to Fortress Trust and BitGo, Fortress Trust being founded by the former founder of Prime Trust, Scott Purcell. The acquisition announcement did not address or confirm rumors that Prime Trust is facing insolvency, which has been the center of speculation on Bitcoin Twitter. This bankruptcy case information is sourced from PACER (Public Access to Court Electronic Records), the official electronic records system for U.S. federal courts. Our research analysts regularly monitor court filings to provide accessible summaries and track asp net basic controls important developments. Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized.

Prime Core Technologies Files for Chapter 11 Bankruptcy (

The agreement comes as customers pull assets from Binance.US after the US … Las Vegas-based Prime Trust raised $107 million in funding midway through 2022, before the crypto bear market really began to bite. But the news of late has not been good, with the firm shedding a third of its workforce at the end of January this year and announcing it would cease operations in Texas where the firm was pursuing a money transmitter license.

The company said it filed for protection along with some of its affiliates after facing a shortfall in customer funds earlier this year. Prime Core Technologies was a cryptocurrency custody company that provided a range of services to institutional investors and individuals interested in the crypto market. Securities and Exchange Commission (SEC), which has put out proposed rulemaking on custody issues. BitGo Holdings, Inc., has announced its intention to acquire Prime Core Technologies, Inc., the parent company of Prime Trust. According to a blog is someone spying on your cell phone 10 ways to tell and how to stop them posted by BitGo, the acquisition aims to bring business continuity, long-term stability and regulated, secure services to Prime Trust clients.

When I search google I find prime core has dealings in crypto and I found an article saying Binance.US was connected to them. Prime Core Technologies, the parent entity of crypto custodian Prime Trust, disclosed a financial setback of $8 million, largely attributed to investments in the algorithmic stablecoin TerraUSD (USTC). The announcement, stemming from an August 24 filing with the United States Bankruptcy Court for the District of Delaware, unveiled that these losses were partitioned into $6 million from client funds and $2 million from treasury coffers.

Additional records also highlight the company’s aggressive spending patterns in the latter part of 2022. Specifically, October and November reported steep net losses of $7.4 million and $8.4 million, in that order. The precise implications of these outflows are still being examined, but the interplay between the company’s financial choices and market variances undeniably influenced its present financial state. Lawsuits from the SEC against Binance affiliates, as well as Coinbase, have ratcheted up retail and institutional trader concerns over storing crypto assets on a centralized exchange. “The combination of Prime Trust and BitGo would be a significant enhancement for the industry,” Prime Trust’s interim chief executive officer and president, Jor Law, said in the announcement.

Further information regarding these account treatment issues, and the procedures for determining ownership of accounts, fiat and cryptocurrencies, is included in Section 2.5 of the Plan. Prime Core is the parent company of Prime Trust, the crypto custodian and on- and off-ramp provider that declared bankruptcy earlier this month. The company at the time said it faced a shortfall of customer funds, which had evidently started earlier in the year, without publicly specifying the cause of the discrepancy. The company is being overseen by a special restructuring committee, which is expected to file a number of motions with the bankruptcy court in the coming days, including requests to continue to pay wages and provide benefits to employees. I received a random email from a prime core technologies stating they were filing for bankruptcy.