Banq, a Prime Trust subsidiary, filed for bankruptcy protection in Nevada on Tuesday, June 13.
According to the filing, Banq has a little over $17 million with total liabilities of $5.4 million.
A lawsuit was filed in 2022 between Banq and Fortress NFT Group, which had former Banq executives — including a former CEO, chief technology officer, and chief product officer.
The suit alleged “irreparable harm and damages to Banq based on Defendants’ theft of Banq’s corporate assets, trade secrets, and proprietary technology.”
“In abuse of their high-level roles, the Defendant Individuals used Banq’s resources to develop technology infrastructure for blockchain non-fungible tokens,” the lawsuit continued.
A judge ordered the case to go to arbitration following the signing of arbitration clauses by the former CEO in early 2023.
In the bankruptcy filing, Banq reported it also has $17.5 million in “causes of actions against third parties” citing “claims against former officers and related entities.”
The filing comes less than a week after BitGo signed a non-binding letter of intent to buy Prime Trust after Blockworks reported that Prime was attempting to raise $25 million quickly.
The terms of the deal were not disclosed, though BitGo would acquire 100% of “the equity of Prime Core technologies, the parent company of Prime Trust.”
The deal will not close until it receives the necessary regulatory approvals.
“This is a landmark transaction, leading a greater shift in the digital asset landscape toward a more secure and sustainable future. With the expected acquisition of Prime Trust, BitGo is well positioned to enhance its best-in-class, trusted solutions and to service the combined customer base,” BitGo’s CEO Mike Belshe said in a statement.
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Source: https://blockworks.co/news/banq-bankruptcy-protection