Swan Bitcoin Hit With Nearly $1 Billion Lawsuit Over Prime Trust Collapse
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- PCT Litigation Trust filed a lawsuit in Delaware Bankruptcy Court seeking repayment of nearly $1 billion in cryptocurrency assets linked to the 2023 collapse of Prime Trust.
- Swan Bitcoin allegedly transferred almost $1 billion worth of assets—including 11,992 BTC (≈$917 million), stablecoins, and XRP—out of Prime Trust just before Prime filed for Chapter 11, citing insider, non‑public information.
- Senior Prime executive who also served as a compensated outside advisor to Swan provided Swan’s CEO Cory Klippstein with encrypted communications that warned of Prime’s imminent bankruptcy, enabling the transfer.
- Prime Trust was forced to shut down by Nevada regulators in June 2023 and filed for Chapter 11 bankruptcy in August 2023, owing up to $82 million to customers.
- Cory Klippstein was in encrypted talks with a senior Prime executive on May 25 2023, just before Prime’s regulator meeting, during which Swan announced its intent to move its entire business.
Why it matters: PCT Litigation Trust stands to recover roughly $1 billion, while Prime Trust’s creditors face the prospect of assets being clawed back, tightening scrutiny on crypto custodians’ pre‑bankruptcy transfers and exposing insider‑info risks.
