Protego Trust, the cryptocurrency custody firm awaiting final approval from U.S. authorities to convert into a nationally chartered trust bank, has been forced to terminate most of its workforce, according to a person familiar with the matter.

The firm was looking to secure fresh funding but has been unable to, making it the latest victim of the continuing crypto bear market, according to a person CoinDesk communicated with via direct messages. News of the layoffs was first reported on Twitter.

While “more than half” of Protego’s workforce has been laid off this week, the charter is still very much in play, the person told CoinDesk. The Office of the Comptroller of the Currency (OCC) has been encouraging due to the emphasis Protego places on security and compliance and the investments made there, the person added.

“Dozens of folks are still involved though not as employees, and some employees are still in place. Money is a problem, though there is a signed deal which has been very slow in funding,” said the source. “Operations, risk management, compliance, data centers/applications etc. are all sitting in a ready to launch state, but until capital comes, Protego is stuck.”

Protego did not respond to requests for comment.

Protego received conditional approval from the OCC, the independent wing of the Treasury Department that oversees the national banking industry, to convert into a nationally chartered trust bank in early 2021. The OCC declined to comment on Protego's status.

However, the final status of the company's application has hung in the balance longer than the allowed 18-month deadline.

Protego raised $70 million during a Series A fundraising round in 2021, which included investment from Coinbase Ventures, FTX and Digital Currency Group, the parent company of CoinDesk. In February 2022, the firm appointed former acting controller of the OCC Brian Brooks to its board of directors.