Post-bankruptcy Prime Trust has filed a lawsuit against Swan Bitcoin, alleging that the Bitcoin services company exploited inside knowledge to siphon nearly $1 billion in assets from the trustee days before its collapse.
The complaint, filed in Delaware Bankruptcy Court, accuses Electric Solidus, the corporate entity behind Swan, of receiving more than $24.6 million in cash, 11,994 bitcoins (BTC) currently worth about $923 million, about $5 million US dollars (USDT) and smaller amounts of other digital assets before Prime Trust’s bankruptcy in August 2023.
At the heart of the allegations is an unidentified senior executive at Prime Trust, who while working at the company was also a paid advisor to Swan through a side arrangement dating back to July 2019.
Four days before Prime Trust met with Nevada regulators on May 26, 2023, the CEO allegedly opened an encrypted chat with Swan CEO Cory Klippsten and set messages to auto-delete every 24 hours. The feature was allegedly turned off the day after the meeting, when Swan withdrew more than 10,000 bitcoins from Prime Trust.
Source: CortListener
The lawsuit is part of a broader effort by Prime Trust’s post-bankruptcy litigation fund to recover assets transferred from the trustee in the weeks before its collapse. The foundation alleges that Swan used insider access to move money ahead of other clients as Prime Trust’s financial condition deteriorated.
“Swan learned that he transferred fiat currencies and cryptocurrencies from Prime immediately before Prime filed for bankruptcy to avoid catastrophic losses,” the complaint wrote.
Cointelegraph reached out to Swan for comment, but did not receive an immediate response.
Related to: House committee pushes Trump to fill CFTC seats as cryptocurrency regulation ramps up
Swan allegedly emptied the Prime Trust accounts
The complaint also alleges that Swan suddenly expanded a partial transfer of assets into a full release of all funds, one day before the Nevada meeting.
Prime Trust employees scrambled to comply before work ended that day, according to Slack communications cited in the filing.
The complaint alleges that Prime created an internal ledger called “PT FBO Swan Customers” on May 25, an account that did not previously exist, to show that Swan’s money had always been held in a separate trust, which would have made it difficult to recover it in the event of bankruptcy.
“However, in substance, these assets were not and were not held in trust for the benefit of Swan’s clients,” the suit alleges.
Plaintiff is seeking recovery under the preferential conversion and actual fraudulent conversion provisions of the Bankruptcy Code, and is asking the court to disallow any future claims Swan may assert against the estate until recovery is made.
magazine: A Guide to the Top Global Emerging Crypto Hubs – Mid-2026
