<div id="readability-page-1"><div>The post-bankruptcy trust for Prime Trust has filed suit against Swan Bitcoin, alleging the Bitcoin services company exploited insider knowledge to pull nearly $1 billion in assets from the custodian days before its collapse.The complaint, filed in Delaware bankruptcy court, accuses Electric Solidus, the corporate entity behind Swan, of receiving over $24.6 million in cash, 11,994 Bitcoin (BTC) currently worth around $923 million, roughly 5 million USDt (USDT) and smaller amounts of other digital assets before Prime Trust's August 2023 bankruptcy.At the center of the allegations is an unidentified Prime Trust senior executive who, while working at the company, was also a paid adviser to Swan through a side arrangement dating back to July 2019.Four days before Prime Trust met with Nevada regulators on May 26, 2023, the executive allegedly opened an encrypted chat with Swan CEO Cory Klippsten and set messages to auto-delete every 24 hours. The feature was allegedly turned off the day after the meeting, when Swan withdrew more than 10,000 Bitcoin from Prime Trust.<figure></figure>Source: CourtListenerThe lawsuit is part of a broader effort by Prime Trust’s post-bankruptcy litigation trust to recover assets transferred out of the custodian in the weeks leading up to its collapse. The trust alleges Swan used insider access to move funds ahead of other customers as Prime Trust’s financial condition deteriorated.“Swan knew to transfer fiat and crypto from Prime immediately prior to Prime filing for bankruptcy to avoid catastrophic losses,” the complaint wrote.Cointelegraph reached out to Swan for comment, but did not receive an immediate response.Swan allegedly emptied Prime Trust accountsThe complaint further alleges that Swan abruptly expanded a partial asset transfer into a full evacuation of all funds, one day before the Nevada meeting.Prime Trust staff scrambled to comply before the close of business that day, according to Slack communications cited in the filing.The complaint alleges Prime created an internal ledger labeled “PT FBO Swan Customers” on May 25, an account that did not previously exist, to make it appear Swan’s funds had always been held in a separate trust, which would have made them harder to claw back in bankruptcy.“In substance, however, those assets had not been and were not held in trust for the benefit of Swan’s customers,” the suit claims.The plaintiff is seeking recovery under preferential transfer and actual fraudulent transfer provisions of the Bankruptcy Code, and is asking the court to disallow any future claims Swan might assert against the estate until restitution is made.</div></div>

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Prime Trust's post-bankruptcy trust has filed a lawsuit against Swan Bitcoin, alleging the company exploited insider information to withdraw nearly $1 billion in assets just before Prime Trust's bankruptcy in August 2023. The suit claims Swan received significant cash and Bitcoin transfers, facilitated by a senior Prime Trust executive who was also an adviser to Swan. The lawsuit seeks to recover these assets and disallow any future claims from Swan against the estate until restitution is made.

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Swan Bitcoin sued for nearly $1B over pre-bankruptcy transfers from Prime Trust