Swan Bitcoin Hit With Nearly $1B Lawsuit Over Pre-Bankruptcy Transfers From Prime Trust — Here's What's Going On
85d ago · 1 source
Swan Bitcoin is being sued for nearly $1 billion related to transfers it allegedly received from Prime Trust before the crypto custodian's bankruptcy. The lawsuit seeks to recover funds that may have been improperly moved out of Prime Trust ahead of its collapse, potentially at the expense of other creditors and customers.
WHY IT MATTERS
Think of this like a business that was about to go bankrupt moving money to a friend's account right before the doors closed — the court wants to know if that was fair to everyone else who was owed money. Prime Trust was a company that held crypto and cash on behalf of other businesses and their customers. When it collapsed, a lot of people lost access to their funds. Now, the people cleaning up the mess (the bankruptcy trustee) are suing Swan Bitcoin, claiming it received nearly $1 billion from Prime Trust before the collapse. If those transfers weren't legitimate, the court could force Swan to return the money so it can be shared more fairly among all the people who lost out. For anyone in crypto, this is a reminder of why it matters who is holding your money — and what happens when that entity fails.
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