What is Prime Trust accusing Swan Bitcoin of doing?

Prime Trust alleges Swan used insider knowledge and privileged access to move assets ahead of other customers before the custodian entered bankruptcy. The complaint claims Swan acted after learning about Prime Trust’s deteriorating financial condition.

Who is Cory Klippsten in this case?

Cory Klippsten is the chief executive of Swan Bitcoin. The lawsuit alleges he communicated through encrypted auto-deleting chats with a senior Prime Trust executive shortly before the disputed withdrawals occurred.

Why are the encrypted messages important in the lawsuit?

The filing claims an unnamed Prime Trust executive activated disappearing messages in a chat with Klippsten just days before Swan accelerated withdrawals. Prime Trust’s litigation trust argues this suggests awareness of potential financial trouble at the custodian.

What are preferential transfer claims in bankruptcy?

Preferential transfer claims involve allegations that certain creditors or customers were paid or allowed to withdraw assets ahead of others shortly before bankruptcy. Bankruptcy courts can sometimes claw back those transfers to distribute assets more fairly.

What is fraudulent transfer law and why does it matter here?

Fraudulent transfer laws allow bankruptcy estates to challenge transactions allegedly designed to move assets away from creditors improperly. Prime Trust’s trust is attempting to recover assets under those legal provisions.

Did Swan Bitcoin respond to the allegations?

The report said Swan did not immediately provide a public response to requests for comment. The allegations remain claims made in bankruptcy litigation and have not yet been proven in court.

Image for illustrative purposes only. Not a real photo.

Prime Trust lawsuit targets Swan Bitcoin transfers

Q: Why is Swan Bitcoin being sued by Prime Trust?

Swan Bitcoin is being sued by the post-bankruptcy litigation trust for Prime Trust over allegations it withdrew nearly $1 billion in crypto and cash shortly before Prime Trust collapsed in 2023.

Q: How much crypto and cash did Swan allegedly withdraw?

The lawsuit claims Swan’s corporate entity, Electric Solidus, withdrew more than 11,994 Bitcoin, roughly 5 million USDT and over $24.6 million in cash. At current prices, the Bitcoin alone is valued near $923 million.

Written by Isaac FrancisPublished May. 19 2026Last Updated May. 19 2026

Swan Bitcoin has been sued by the post-bankruptcy litigation trust for Prime Trust over allegations it withdrew nearly $1 billion in assets using insider knowledge shortly before Prime Trust collapsed in 2023.

The complaint, filed in Delaware bankruptcy court, alleges Swan’s corporate entity, Electric Solidus, received more than 11,994 Bitcoin, roughly 5 million USDT and over $24.6 million in cash in the days leading up to Prime Trust’s bankruptcy, with the Bitcoin now valued near $923 million.

At the center of the lawsuit is an unnamed senior Prime Trust executive who allegedly maintained a paid advisory relationship with Swan dating back to 2019 while simultaneously working inside the custodian.

The filing claims the executive opened an encrypted auto-deleting chat with Swan CEO Cory Klippsten four days before Prime Trust met with Nevada regulators in May 2023, after which Swan allegedly accelerated withdrawals from the platform.

“Swan knew to transfer fiat and crypto from Prime immediately prior to Prime filing for bankruptcy to avoid catastrophic losses,”

The complaint stated.

The lawsuit further alleges Swan abruptly expanded what had initially been a partial asset transfer into a complete withdrawal of all funds one day before the Nevada regulatory meeting, with Prime Trust employees allegedly scrambling internally to process the transfers.

Prime Trust’s litigation trust is seeking recovery under preferential transfer and fraudulent transfer provisions of US bankruptcy law, while also asking the court to block Swan from asserting future claims against the bankruptcy estate until restitution is made.

At the time of reporting, Bitcoin price was $77,022.60.