Swan Bitcoin Sued for Nearly $1B Over Prime Trust Collapse Insider Transfers
PCT Litigation Trust has sued Swan Bitcoin (Electric Solidus, Inc) in Delaware Bankruptcy Court to recover nearly $1 billion in cryptocurrency allegedly transferred with inside knowledge before Prime Trust's 2023 collapse. The suit claims Swan used non-public information from a Prime senior executive who also served as Swan's compensated advisor to transfer 11,992 BTC (≈$917M), plus $22.4M in USD, $5M in stablecoins, and 91,444 XRP before Prime filed for Chapter 11 bankruptcy in August 2023. Swan allegedly took steps to avoid the 90-day preference clawback period by orchestrating the transfer after learning of Prime's impending insolvency. Prime Trust was shut down by Nevada regulators in June 2023 due to heavy debt and inability to service customers, owing up to $82M in missing fiat deposits. Swan argues that customer assets held in trust accounts are not part of the bankruptcy estate and should not be available to general creditors. The case highlights legal questions around insider information usage in crypto custody failures.
Key facts
- Lawsuit seeks return of 11,992 BTC (~$917M), $22.4M USD, $5M stablecoins, and 91,444 XRP.
- Swan allegedly used inside info from a Prime executive who was also its paid advisor.
- Prime Trust collapsed in June 2023, filing Chapter 11 in August 2023 owing $82M.
- Swan transferred assets just before Prime's bankruptcy, avoiding the 90-day preference period.
- Swan argues trust-held assets are not part of the bankruptcy estate.