Another domino in Bermuda’s digital asset space has fallen.

CrossTower Bermuda Ltd, which in October 2020 was one of the first major cryptocurrency exchanges to receive a licence to operate from the Bermuda Monetary Authority, was wound up in the Supreme Court of Bermuda on Friday morning.

Larry Mussenden, the Acting Chief Justice, granted an Order sought by the company, which brought the winding-up petition under section 16(e) of the Companies Act 1981 on the basis that it was unable to pay its debts as they fall due.

The Official Receiver has been appointed as the provisional liquidator of the company.

Kyle Masters, of law firm Carey Olsen, representing CrossTower Bermuda, told the court that his client in July 2021 guaranteed debt taken on by its US-based parent company in the aggregate amount of $3 million.

Mr Masters said the Bermuda company has $215,000 in assets and “just shy” of $3.3 million in liabilities.

He said: “The company was initially able to onboard various clients. However, its business became unsustainable as it was unable to generate sufficient revenue or raise sufficient capital to support its operations and offset the costs involved in running the business.

“In addition, the US parent is being wound up in the United States.”

CrossTower was granted a Class M licence by the BMA under the Digital Asset Business Act in October 2020.

The licence, which was granted for a defined period of time, enabled CrossTower to operate as a digital asset exchange and custodial wallet service provider.

In April 2021, the BMA granted CrossTower Bermuda a Class F licence, which does not have an expiry date.

Allowed business activities under the DABA licence included operating as a digital asset exchange, providing custodial wallet services, operating as a digital asset derivative exchange provider, and operating as a digital assets services vendor (market maker for digital assets).

CrossTower Bermuda’s demise is a further blow to the island’s efforts in the fintech arena.

Last November, island-based BlockFi International Ltd was wound up in the Supreme Court.

Later that month, Bittrex Global, the cryptocurrency exchange with offices in Bermuda and Liechtenstein, encouraged its customers to withdraw their assets “as soon as possible” as it gave notice of plans to close up shop.

That company disabled all trading activity on December 4.