Swan Bitcoin Sued for $970 Million Over Alleged Use of Prime Trust Bankruptcy Inside Information
Prime Trust previously held assets for Swan Bitcoin customers but filed for bankruptcy on August 14, 2023, after running short of funds. The dispute centers on whether customer assets were properly segregated in trust and whether pre-bankruptcy transfers can be clawed back under preferential- and fraudulent-transfer rules. The outcome could shape the limits of creditor recoveries when crypto custodians collapse.
PCT Litigation Trust sued Swan parent Electric Solidus in Delaware bankruptcy court on May 15, 2026, seeking the return of about $970 million. The claim covers 11,994.08 bitcoin, $24.66 million in cash and about 5 million USDT. The trust alleged that Swan moved the assets first after obtaining inside information on May 22, 2023. Swan denied making a run on Prime Trust and said the transfers were part of a custody migration planned well in advance.
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The history behind this eventSwan Bitcoin Seeks Subpoenas for Cantor Fitzgerald and Howard Lutnick
Swan Bitcoin and Tether formed mining joint venture 2040 Energy in June 2023, with Tether providing funding and Swan managing operations. By June 2024, Tether had invested $408.22 million. Swan alleges that former employees took confidential information in August 2024, formed Proton Management and took over the business, prompting scrutiny of dealings with Tether.
On March 23, 2026, Swan filed an application for discovery under Section 1782 of Title 28 of the U.S. Code in the U.S. District Court for the Southern District of New York. It is seeking subpoenas for Cantor Fitzgerald and its former CEO, Howard Lutnick, for documents concerning Tether, 2040 Energy and the employees’ departures. The court held a procedural hearing on April 2, and Swan filed a reply on May 28. The application remains pending.
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