Swan Bitcoin is facing a nearly $1 billion lawsuit tied to the 2023 collapse of crypto custodian Prime Trust. PCT Litigation Trust filed the complaint against Electric Solidus, Inc., the company operating as Swan Bitcoin, in the U.S. Bankruptcy Court for the District of Delaware. The suit seeks to recover crypto and cash that the trust says moved out of Prime Trust just before its bankruptcy filing.
Timeline of 11,994 BTC and Cash Transfers
The claim centers on approximately 11,994 Bitcoin, $24.66 million in cash, roughly $5 million in stablecoins, and 91,144 XRP. At current Bitcoin prices, the trust is seeking over $970 million. Court documents show these assets were transferred from Prime Trust shortly before it sought Chapter 11 protection. The trust argues the assets should return to the estate for creditors.
Insider Information Allegations Against Swan
The complaint alleges Swan used non-public information to avoid losses before Prime Trust failed. A senior Prime Trust executive, who also served as a paid outside adviser to Swan, allegedly contacted Swan CEO Cory Klippsten before key meetings with Nevada regulators. On May 25, 2023, Swan asked to move its entire business away from Prime Trust. The next day, Prime Trust met with the Nevada Financial Institutions Division. The filing says: “Swan knew to transfer fiat and crypto from Prime immediately prior to Prime filing for bankruptcy to avoid catastrophic losses.” Swan has not yet filed a court response to this complaint.
Swan's Trust Account Defense
Swan has denied the core argument through a representative statement. The company said: “Prime Trust held customer property in individually-owned trust accounts.” It added, “Customer assets held by a trust company are not available to general unsecured creditors, and we expect the courts to say so.” This defense frames the dispute around whether the assets belonged to Swan, Swan customers, or the Prime Trust bankruptcy estate. The court will now need to examine custody agreements, transfer timing, and alleged insider access.
Prime Trust Collapse Background
Prime Trust’s collapse began in 2023 after Nevada regulators said the custodian was insolvent and could not meet customer withdrawal requests. Prime Trust later filed for Chapter 11 bankruptcy. crypto.news previously reported that Prime Trust had used customer money to pay withdrawals since December 2021 and owed customers about $82 million in missing deposits and fiat. The new Swan case adds another court fight to the Prime Trust fallout, keeping attention on crypto custody controls and how courts handle customer assets after a custodian fails. Separately, Swan Bitcoin is also involved in other legal disputes, including a subpoena request for Cantor Fitzgerald and Howard Lutnick in a Bitcoin mining fight tied to Tether and former staff.