Oh, the drama! The intrigue! The Bitcoin brouhaha! Swan Bitcoin, our feathered friend in the crypto coop, is facing a lawsuit that’d make even the Rothschilds blush-a cool $970 million! And why? Because someone forgot to lock the henhouse before Prime Trust went belly-up in 2023. Cluck cluck, indeed.
- PCT Litigation Trust is squawking for $970 million from Swan Bitcoin, claiming they flew off with 11,994 BTC, cash, stablecoins, and XRP before Prime Trust’s bankruptcy. Talk about a pre-flight checklist!
- The complaint crows that Swan moved all this crypto goodness just before Prime Trust filed for bankruptcy. Coincidence? I think not. More like a well-timed migration.
- Swan, ever the cool cucumber, clucks back, “Hey, those assets were in trust accounts! Not our fault the fox was already in the henhouse.”
PCT Litigation Trust has filed a lawsuit against Electric Solidus, Inc. (aka Swan Bitcoin) in the U.S. Bankruptcy Court for the District of Delaware. They’re demanding the return of crypto and cash that allegedly took a one-way flight out of Prime Trust before it crashed and burned.
A Stretto court filing-yes, the same folks who bring you thrilling bankruptcy paperwork-says Swan allegedly moved fiat and crypto faster than a New York minute before Prime Trust’s bankruptcy. Timing is everything, folks!
The claim? Oh, just 11,994 Bitcoin, $24.66 million in cash, $5 million in stablecoins, and 91,144 XRP. Blockspace, the crypto gossip column, reports the trust is clucking for over $970 million based on today’s Bitcoin prices. Cha-ching!
Prime Trust’s Collapse: Insider Info or Just a Lucky Guess?
The complaint squawks that Swan used non-public info to avoid losses before Prime Trust’s collapse. Apparently, a senior Prime Trust exec-who also moonlighted as Swan’s adviser-gave Swan’s CEO a heads-up before a meeting with Nevada regulators. Talk about a birdie telling tales!
The suit claims Swan asked to move its entire business away from Prime Trust on May 25, 2023, one day before Prime’s meeting with the Nevada Financial Institutions Division. Timing? Immaculate. Losses avoided? Absolutely. Other Prime customers? Left holding the empty feed bag.
The filing crows, “Swan knew to transfer fiat and crypto just before Prime filed for bankruptcy to avoid catastrophic losses.” Swan hasn’t responded in court yet, but we’re sure their lawyers are drafting a masterpiece of clucks and denials.
Swan Bitcoin: “Not Our Circus, Not Our Monkeys!”
Swan has denied the claims faster than a chicken denies being a dinosaur. They squawk, “Prime Trust held customer property in individually-owned trust accounts. Those assets aren’t for general unsecured creditors. The courts will back us up-we hope.”
Their defense? “Customer assets held by a trust company are not available to general unsecured creditors. We expect the courts to say so.” Translation: “Not our problem, buddy!”
The trust wants the assets back in the estate for creditors. Swan says, “Hands off our customers’ stuff!” Now the court has to peck through custody agreements, transfer timing, and alleged insider info. Popcorn, anyone?
Prime Trust’s Collapse: A Crypto Custody Cautionary Tale
Prime Trust’s downfall began in 2023 when Nevada regulators said the custodian was insolvent and couldn’t meet withdrawal requests. Surprise, surprise! Regulators placed Prime Trust into receivership after finding its financial position as stable as a three-legged stool.
Crypto.news previously reported that Prime Trust filed for Chapter 11 bankruptcy after Nevada regulators found the company insolvent. They’d been using customer money to pay withdrawals since December 2021 and owed customers about $82 million in missing deposits and fiat currency. Oopsie!
The Swan Bitcoin case adds another layer of drama to the Prime Trust saga. It also keeps the spotlight on crypto custody controls, trust account treatment, and how courts handle customer assets after a custodian fails. Spoiler: It’s messy.
And let’s not forget Swan Bitcoin’s other legal squabbles, including their subpoena request for Cantor Fitzgerald and Howard Lutnick in a Bitcoin mining fight tied to Tether and former staff. Swan’s lawyers must be earning their Bitcoin in overtime!
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2026-05-19 10:14