Swan Bitcoin Sued for Nearly $1 Billion Over Alleged Insider Information Before Prime Trust Bankruptcy

According to Decrypt, PCT Litigation Trust filed a lawsuit against Swan Bitcoin in Delaware bankruptcy court, seeking nearly $1 billion in damages. The trust accuses Swan Bitcoin of using insider relationships with Prime Trust employees to obtain non-public information and transfer approximately 11,992 BTC (worth ~$917 million at current prices), $22.4 million in cash, $5 million in stablecoins, and 91,444 XRP before Prime Trust filed for bankruptcy, thereby avoiding major losses.

Prime Trust was forcibly shut down by Nevada regulators in June 2023 due to insolvency and filed for bankruptcy protection in August, owing customers approximately $82 million. Swan Bitcoin responded that customer assets held in trust by Prime Trust are not bankruptcy property and should not be used to settle unsecured creditors’ claims, expecting the court to support its position.