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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.

Administrator: “We’re Moving Toward Resolution”

At Monday’s session, attorney Donald Detweiler, representing the plan administrator, told the court that litigation efforts were also ramping up. A litigation trust formed under the plan has already filed dozens of clawback suits targeting previous transfers, while additional actions are underway against Prime Core’s former directors and officers.

Detweiler said claims reconciliation should be finished by year’s end, clearing the path for the administrator to begin distributing recoveries. To streamline the process, a dedicated website portal has been launched for creditors to verify and submit their information.

“We think the website is a unique way to get it done,” Detweiler told the court, describing the platform as a more transparent and efficient method to manage claims.

The Final Countdown for Creditors

After a year of turmoil following the Prime Core Chapter 11 filing, creditors are finally seeing a light at the end of the tunnel. With $35 million now in hand, the estate is poised to begin payouts in 2026—though the litigation over clawbacks and insider actions may still shape how much each creditor ultimately receives.

Prime Core’s saga, marked by lost trust and frozen assets, is becoming a cautionary tale in the volatile world of digital finance—where one failed custodian’s missteps could ripple across the crypto landscape.