Banq, a platform for the primary issuance of securities controlled by Cambria Capital, a regulated broker-dealer, has filed for bankruptcy, according to many reports.
Chapter 11 Dockets distributed the news via Twitter.
Crypto software company Banq filed for bankruptcy protection today in Nevada https://t.co/ckmt6V6AMl pic.twitter.com/4EmKzowj24
— Randall G. Reese (@Chapter11Cases) June 13, 2023
While multiple reports claimed that Banq was a subsidiary of Prime Trust, this is not the case. According to an individual with information on the topic, Prime Trust held less than a 3% stake in Banq.
Banq’s claim to notoriety was its Reg A+ offering that saw MYOMO raise capital and then trade on the NYSE. Under the Reg A+ exemption, an issuer may decide to trade shares on an exchange or marketplace immediately.
Banq sought to establish a digital platform to facilitate capital formation and then trading on secondary markets. According to its website, Banq facilitated nine separate securities offerings using Reg A+ inclusive of MYOMO. Apparently, no offerings have been listed on the platform in the past several years.
At the same time, Banq focused on the emerging digital security market by incorporating blockchain technology.
As for Prime Trust, the company is in the midst of a sale to BitGO, which has signed a term sheet to acquire 100% of the equity in the company.
Few details are available as to why Prime Trust appears to have been compelled to pursue a last-minute sale which is still in the works. At one time, Prime Trust was the hottest entry in the private securities market, enabled by online capital formation. When the crypto sector emerged, Prime Trust quickly moved to take advantage of this fast-growing industry while exiting more traditional assets. In the past year, the crypto sector has floundered, which may have impacted the performance of Prime Trust.
Some industry insiders worry that crypto industry optics are poised to worsen if more firms go bust or rush to find a takeover partner.