Swan Bitcoin Faces $1 Billion Lawsuit Over Prime Trust Collapse
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Highlights:
- Swan Bitcoin is facing a lawsuit tied to the Prime Trust bankruptcy collapse.
- Prime Trust claims Swan Bitcoin used insider information before moving crypto assets belonging to customers.
- Swan Bitcoin argues the bank held customer assets in protected trust accounts before the filing.
The bankruptcy estate of Prime Trust has filed a lawsuit against Swan Bitcoin that seeks nearly $1 billion in crypto assets and cash. The PCT Litigation Trust filed the complaint on May 15 in the U.S. Bankruptcy Court for the District of Delaware. The lawsuit names Electric Solidus, Inc., the company that operates Swan Bitcoin, as the primary defendant. Judge J. Kate Stickles will oversee the bankruptcy dispute under Adversary Proceeding No. 26-50331.
According to Decrypt, US-based Bitcoin financial services firm Swan Bitcoin is facing a lawsuit over allegations that it moved assets using insider information before Prime Trust collapsed.
The complaint claims Swan transferred BTC, stablecoins, and XRP shortly before Prime…
— ChainInsight 链洞察 (@ChainInsightLab) May 19, 2026
The complaint seeks 11,994 BTC worth nearly $938 million at current market prices. The litigation trust also seeks $24.66 million in cash and nearly $5 million in USDT and USDC transfers. In addition, the lawsuit includes 91,144 XRP among the disputed crypto transfers linked to Prime Trust accounts.
According to the suit, Swan Bitcoin sent crypto and cash to Prime Trust from May 16 to Aug. 14, 2023, when Prime Trust was already insolvent. Bankruptcy law classifies that timeline as a 90-day preference period before a Chapter 11 filing. According to the litigation trust, Swan Bitcoin did not suffer major losses, whereas other Prime Trust clients lost their customer assets when the collapse occurred.
Court filings show Swan Bitcoin moved customer assets to Fortress and BitGo before Nevada regulators shut down Prime Trust operations. The complaint claims Swan Bitcoin described the transfers to customers as system upgrades during the withdrawal period. The filing also alleges that Swan Bitcoin recognized potential clawback exposure before moving its business away from Prime Trust.
Insider Chat Claims Raise Questions Over Prime Trust Withdrawals
The complaint alleges a senior Prime Trust executive exchanged disappearing encrypted messages with Swan CEO Cory Klippsten before the transfers. According to the filing, the executive also worked as a paid outside adviser to Swan Bitcoin during that period. The complaint states the executive started the encrypted conversation with Klippsten on May 22, 2023.
Court records show the Prime Trust executive activated 24-hour disappearing messages before regulators met the custodian. The encrypted conversation reportedly started four days before Prime Trust met Nevada financial regulators on May 26. The next visible notification appeared on May 27 after Swan Bitcoin transferred more than 10,000 BTC from Prime Trust. Court records also show the executive disabled the disappearing message feature that same day.
The litigation trust alleges Swan Bitcoin used insider and non-public information to transfer customer assets before Prime Trust collapsed. The complaint states, “Swan knew to transfer fiat and crypto from Prime immediately prior to Prime filing for bankruptcy to avoid catastrophic losses.” The lawsuit also alleges Swan Bitcoin requested to move its entire business away from Prime Trust on May 25.
The lawsuit challenges Prime Trust agreements that allegedly allowed customer asset commingling inside company-controlled accounts. In addition, the complaint claims Prime Trust removed fiduciary obligations through custodial agreements and API contracts signed with Swan Bitcoin. The complaint claims the May 25 ledger entry falsely showed Swan customer assets remained segregated before the bankruptcy collapse. The filing identifies the ledger entry under the label “PT FBO Swan Customers.”
Swan Bitcoin Defends Customer Accounts During Prime Trust Bankruptcy
Swan Bitcoin has denied claims that the disputed crypto transfers belong to the Prime Trust bankruptcy estate. A Swan Bitcoin representative said Prime Trust stored customer assets in individually owned trust accounts before the collapse. The representative also argued that unsecured creditors cannot claim customer assets held by a trust company during bankruptcy proceedings.
In a separate court case, Swan Bitcoin asked a New York court to approve subpoenas tied to a crypto mining deal with Tether. The dispute centers on a failed mining venture called 2040 Energy.
Swan Bitcoin has filed a U.S. court application seeking to subpoena Cantor Fitzgerald and former CEO Howard Lutnick as part of a dispute over a failed Bitcoin mining venture.
The firm alleges former employees may have taken confidential information and used it in a competing… pic.twitter.com/eqtqKIAE2U
— Todayq News (@todayqnews) March 26, 2026
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