Banq—a Nevada-based crypto payments and savings platform—filed for Chapter 11 bankruptcy protection on Tuesday, according to court documents. 

The filing arrives days after crypto custodian BitGo signed a letter of intent to acquire Banq’s parent company, Prime Trust, amid swirling rumors that the latter firm was facing insolvency. 

In its written reorganization plan, attorneys representing Banq claimed that Banq’s troubles began back in 2021 because of mismanagement under former CEO Scott Purcell. 

After Purcell resigned alongside two other executives late that year, the company’s board of directors discovered that Purcell and the others had secretly transferred large amounts of company data and assets to their newly founded company, Fortress NFT Group. This included “the vast majority of [Banq] employees, trade secrets, intellectual property, technology, business opportunities, and equipment.”

Banq later faced legal challenges from N9 Advisors related to a $3 million unsecured promissory note that Purcell presented to N9 in July 2021. Attorneys believe N9 is a “substantial investor in Fortress.”

“As a result of the Purcell defendants’ misappropriation of the debtor’s assets and the expenses a

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Author: Andrew Throuvalas

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