The collapse of cryptocurrency custodian Prime Core has entered its final chapter, as the company’s Chapter 11 plan administrator revealed that roughly $35 million was raised through crypto asset sales, setting the stage for long-awaited creditor distributions expected to begin early next year.
At a hearing before U.S. Bankruptcy Judge J. Kate Stickles, counsel for the plan administrator confirmed that the sale of Prime Core’s digital assets had been completed and that efforts to gather creditor data were now underway. The team anticipates that recoveries will begin rolling out in the first half of 2026.
From Crypto Custody Giant to Bankruptcy Fallout
Prime Core’s downfall began in August 2023, when it filed for Chapter 11 protection after its flagship unit, Prime Trust LLC, was seized by Nevada regulators. Officials accused the firm of being severely underfunded, and after failed acquisition attempts, Prime Core’s reorganization transformed into a liquidation plan confirmed in December 2023.
The bankruptcy court later ruled in July that the company’s assets were so entangled with customer and creditor funds that everything had to be treated as part of the bankruptcy estate. This ruling paved the way for the court to authorize the conversion of crypto holdings into fiat currency for claim payments.
