The industry-wide “contagion effect” is spreading to Crypto Valley. Covario, a Zug-based “one-stop shop” for cryptocurrency brokerage services, has to file for bankruptcy. The 35 employees were only informed about the fate of their employer shortly before Christmas. Covario was an independent cryptocurrency prime broker for institutional investors based in Zug that was supposed to stand out from the competition through its trading in cryptocurrencies, safekeeping, financing and various other custom solutions. Just before the end of the year, the Swiss start-up closed its doors, as an employee revealed to Inside Paradeplatz. The website has since been taken offline. Apart from the resignations of high-ranking executives, there are no traces of the bankruptcy in the trade register excerpt of Covario AG. Open questions for employees The employees were surprised with the bad news shortly before the holidays. According to the insider, they had last received their salary at the end of October, while the cryptocurrency broker had not paid its AHV contributions since the early summer. The owed contributions to the pension fund have also been open for months. In the last few weeks, the two executives had opened new branches in England and the Far East and hired about a dozen new employees. These additional salaries are said to have contributed to the company’s burn rate accelerating despite the difficult situation. According to the insider, Covario had been burning about CHF 500,000 in cash per month recently. Meanwhile, efforts to find a buyer for the company have failed. Minds Pirro Morandi on recent developments around digital assets Background Developing economies: a proven use case for crypto Investing Bitcoin’s total addressable market (TAM) – a fundamental analysis Basics Crypto Wallets – The key in dealing with digital assets Reasons for Covario’s bankruptcy still unclear In response to a request from the CVJ.CH editorial team, CEO Mark Banner stated that the prime broker is “not yet in a position to comment on the rumors.” It is therefore unclear how much the losses actually are. Inside Paradeplatz believes that the outstanding claims are “mounting into the millions.” It remains to be speculated whether the bankruptcy of the former second-largest cryptocurrency exchange, FTX, had an impact on Covario’s financial situation. The only publicly available information refers to claims for payment against the insolvent credit platform Celsius since July. Court documents revealed a loss of $11.3 million shortly after the proceedings were opened. This puts Covario in sixth place among Celsius’s creditors. The ten most important Celsius creditors / Source:: Bloomberg