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Nevada Orders Fortress Trust Shutdown Amid Escalating Liquidity Crisis
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Nevada regulators shut down Fortress Trust, citing liquidity shortfalls and compliance lapses, intensifying concerns over solvency standards within crypto custody firms.
Regulators in Nevada have formally ordered cryptocurrency custodian Fortress Trust, recently renamed Elemental Financial Technologies Inc., to cease operations after uncovering severe liquidity stress and mismanaged client reserves. The cease-and-desist notice cited capital deficiencies and failure to safeguard customer assets. Investigators found evidence of delayed withdrawal processing and incomplete accounting reconciliations. Market analysts warned the move could ripple across smaller custodians dependent on similar infrastructure. Fortress, once known for institutional-grade custody and tokenization services, now faces potential bankruptcy proceedings in state court.