Crypto custodian Prime Trust filed for Chapter 11 bankruptcy protection in Delaware after facing a shortfall in customer funds. 

In an Aug. 15 filing, the firm estimated between 25,000 to 50,000 creditors, and the five largest claims amounted to a total of $105 million. The single largest unsecured creditor had a claim of $55 million, with the second largest owed a total of $31.7 million.

Prime Trust said its liabilities were between $100 million to $500 million as opposed to its assets which fell between the $50 million and $100 million range. 

“The Company intends to file a number of motions with the Bankruptcy Court designed to facilitate the Company’s orderly evaluation of all strategic alternatives, including potentially a sale of the Company’s assets and operation,” said the firm in a press release.

The bankruptcy filing follows the firm being placed into receivership last month, after the Nevada Department of Business and Industry’s Financial Institutions Division (FID) found that the firm was unable to honor customer withdrawals. The FID ordered Prime Trust to cease all operations as it was in violation of Nevada regulations. 

The crypto custody firm used to service some of the largest companies in the crypto space, including FTX, Binance.US and Celsius Network.

The FID’s investigation found that Prime Trust was unable to access some of the wallets where it stored customers’ crypto holdings in December 2021. Between then and March 2022, the firm reportedly purchased additional cryptocurrency using customer funds to honor some withdrawal requests. 

The regulator also found that the firm owed over $85 million worth of fiat to its clients, but had less than $3 million on hand.