Prime Belief and Fortress Belief, Scott Purcell’s two crypto custodians that beforehand boasted purchasers BinanceUS, Swan Bitcoin, Abra, and TrueUSD, have each collapsed after disturbing allegations of economic misconduct.
On October 22, Nevada’s Monetary Establishments Division revealed that a number of third-party companies declined to comply with by way of on acquisition gives or present adequate bridge financing for Fortress Belief, the successor to Purcell’s first failed try at crypto custody, Prime Belief.
This month’s collapse of Fortress Belief is eerily just like Purcell’s 2023 failure.
Prime Belief filed for Chapter 11 chapter in August 2023 after its Banq subsidiary collapsed and Nevada’s Monetary Establishments Division revealed that it had improperly utilized clients’ funds to cowl others’ withdrawals.
The previous president of the Financial institution of Nevada needed to step in as receiver.
Regulators revealed Prime Belief’s staggering obligations as of June 26, 2023: $85.6 million in money obligations in opposition to simply $2.9 million in money.
In addition they revealed Prime Belief’s alleged lack of crypto pockets keys in December 2021 that it had hidden from public view for years.
A few months later, the corporate filed for chapter. By that time, it had switched CEOs from Tom Pageler to Jor Legislation however none of their turnaround efforts succeeded.
BTW
The Prime Belief insolvency was shady asf
They did not fats finger a transaction. They did not get hacked.
They merely “lost” their non-public key.
Do not be stunned if sooner or later this pockets randomly awakens and Scott Purcell is not any the place to be foundhttps://t.co/tphI5SsENn
— Pledditor (@Pledditor) October 25, 2025
Scott Purcell creates Fortress Belief
As Purcell pale away from Prime Belief in 2021, he started creating the same Fortress Belief. Someway, he satisfied Nevada monetary regulators to grant Fortress Belief a belief firm license by Might 2022.
They’d quickly come to remorse that call.
By September 2023, Fortress Belief claimed a “hack” had resulted in roughly $15 million in buyer losses.
In early September 2023, Fortress initially said there was “no loss of funds,” though subsequent reporting revealed a unique fact.
On September 8, 2023, Ripple introduced it had agreed to accumulate Fortress Belief and canopy these buyer losses. Nevertheless, by September 28, Ripple CEO Brad Garlinghouse introduced the corporate wouldn’t proceed with the acquisition, although Ripple would stay an investor.
In 2023 — just like his departure from the collapsing Prime Belief in 2021 — Purcell stopped serving as CEO of Fortress Belief. The corporate would undergo a few new CEOs, Wealthy Hauschild and Anthony Botticella.
Sadly, similar to Prime Belief’s government carousel, they might fail to stop insolvency.
Lastly, on October 22 this 12 months, the Nevada Monetary Establishments Division issued a cease-and-desist order in opposition to Fortress Belief, discovering the corporate “on the verge of insolvency” with property “wholly inadequate to meet customer obligations.”
The order prevents Fortress Belief from accepting fiat forex, crypto property, or commodities from present or new purchasers for custodial functions.
A sample of habits from Prime Belief to Fortress Belief
In a declaration filed alongside Fortress Belief’s stop and desist order, Botticella said, “I learned after assuming the position of chief executive officer that the trust was experiencing severe financial difficulties and challenges related to events that occurred prior to assuming my role.”
Each Prime Belief and Fortress Belief collapsed underneath related circumstances: Failure to correctly safeguard buyer property, incapability to satisfy buyer withdrawals, and important shortfalls between liabilities and funds which can be hidden from public view for months or extra.
Each firms have been Nevada-chartered firms that served the crypto trade, and each failures resulted in Nevada regulatory intervention citing unsound enterprise practices.
The 2 failures, sharing the identical founder, reiterate the dangers of centralized custodians usually and Purcell particularly.
