Orrick Secures Dismissal in Prime Trust Crypto Litigation

U.S. Bankruptcy Court for the District of Delaware granted Orrick's motion for dismissal with prejudice of all claims against the company in litigation arising from the Chapter 11 bankruptcy of cryptocurrency platform Prime Trust. The Court agreed with Orrick's argument that the complaint failed to allege with sufficient specificity that PFI received any of the challenged transfers of digital assets.

Orrick represents Plutus Financial Inc., Plutus Lending LLC and Abra Trading LLC in the proceedings.

THE COMPANY

Abra is a digital-asset wealth and treasury manager.

THE IMPACT

The litigation stems from the bankruptcy of Prime Trust, a former cryptocurrency custody and settlement provider that filed for Chapter 11 in 2023. A litigation trust established under Prime Trust's confirmed bankruptcy plan has pursued claims against former customers and counterparties, including the Abra entities.

The ruling eliminates all claims against Plutus Financial Inc., narrowing the scope of one of the largest adversary proceedings brought by the Prime Trust litigation trust.

The broader case raises important questions about how traditional bankruptcy laws apply to digital assets, including the ownership and tracing of cryptocurrency, the treatment of commingled assets and the recovery of blockchain-based transfers. The case highlights emerging legal questions that could shape how digital assets are treated in future bankruptcy proceedings.

THE TEAM

The Orrick team is led by David Litterine-Kaufman and Raniero D'Aversa. The team also includes Manny Grillo, Marsha Mogilevich, John Ansbro, John Narducci, James Wigginton, Travis Cherry, Ari Roytenberg, Jenna Busche, Michael Trentin, and Ali Zablocki.