Swan has really managed a pretty spectacular crash and burn. Even if they prevail, this kind of thing doesn't exactly inspire confidence.
The suit alleges that Swan withdrew 11,994.08 BTC (worth $938 million at publication time), $24.66 million in cash, roughly $5 million in stablecoins, and 91,144 XRP (worth $129,484 at publication time) from Prime Trust in the 90 days before Prime’s August 2023 bankruptcy filing.
In total, the trust is seeking to recover over $970 million, based on bitcoin’s current price.
For its part, Swan Bitcoin disputes the claims, per a comment given to Blockspace:
“Prime Trust held customer property in individually-owned trust accounts. The bankruptcy estate is now trying to take assets it held in trust as custodian, from a party that never received them. Customer assets held by a trust company are not available to general unsecured creditors, and we expect the courts to say so,” said a representative for Swan Bitcoin.
The complaint disputes this framing, alleging the governing agreements between Swan and Prime expressly disclaimed any fiduciary relationship and that Prime created a “PT FBO Swan Customers” internal ledger designation on May 25, 2023—one day before its meeting with Nevada regulators—to give the false appearance that Swan’s assets had been held for the benefit of Swan’s customers the entire time.
XRP???
so much for them claiming to be a bitcoin only company.
FUCK YOU COREY
So Prime told customers and Gensler presumably that assets were in individual seperated mini accounts, even in the event of collapse these lil sub accounts would be safu
But allegedly they mixed up all the corn with god knows what and created accounting entries just before it blew up....allegedly
So potentially the customers could get told that because of the mess, the sats legally may not have been theirs all along
Damn bro if there ever was a poster for NYKNYC
I don't recall this particular Prime blowup, just quickly researched it, seems v. Similar to the other big blowups
Here come the clawbacks! But should those customers get compensation. Or is all lost with the bankruptcy
$970M vanishes right before bankruptcy, Swan might be legal, but it’s hard to call it anything other than yikes.