Cory Klippsten built Swan Bitcoin on the promise it was the only Bitcoin platform you could trust. A new bankruptcy lawsuit alleges his company used an encrypted insider tip to pull nearly a billion dollars out of a collapsing custodian, days before it imploded.
Cory Klippsten has never been shy about what he thinks of the rest of the crypto industry. The founder and CEO of Swan Bitcoin, one of the most prominent Bitcoin-only investment platforms in the United States, spent years on social media calling virtually every other cryptocurrency a fraud, a Ponzi scheme, or a criminal enterprise. XRP, the digital asset linked to blockchain payments company Ripple, was a frequent target.
“Ripple is a scam,” he posted publicly in November 2022. The message was repeated across hundreds of posts.
Now Swan Bitcoin is at the center of a sprawling legal fight. Court filings are raising uncomfortable questions about what “Bitcoin only” actually means when the lawyers start going through the books.
On May 15, 2026, a 94-page adversary complaint was filed in the U.S. Bankruptcy Court for the District of Delaware. The PCT Litigation Trust, created to pursue claims on behalf of creditors and customers of failed crypto custodian Prime Trust’s parent company, sued Electric Solidus, Inc., the legal entity behind Swan Bitcoin.
The complaint alleges that Swan Bitcoin used confidential insider information to pull nearly $1 billion in assets out of Prime Trust just weeks before the custodian collapsed.
“Swan, unlike most of Prime’s customers, did not suffer significant losses because Swan had insider, non-public information. Swan knew to transfer fiat and crypto from Prime immediately prior to Prime filing for bankruptcy to avoid catastrophic losses.”
PCT Litigation Trust, 94-page complaint
The numbers are staggering. The lawsuit seeks to recover approximately 11,994 Bitcoin, worth roughly $923 million at current prices, plus $24.66 million in cash, approximately $5 million in stablecoins including USDT and USDC, and 91,144 XRP. Combined, the claim is approximately $970 million.
Swan Bitcoin has denied the core allegations. In a statement, the company said, “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.”
That may ultimately be true. But the road to finding out will be long, expensive, and very public. In the meantime, Swan clients are left with questions the company has not fully answered.
The lawsuit’s central story begins in spring 2023, when Prime Trust was quietly deteriorating. According to the complaint, a senior executive at Prime Trust also served as a paid outside advisor to Swan Bitcoin and reportedly lived near Klippsten. The complaint claims that executive knew what was coming.
On May 22, 2023, four days before Prime Trust was scheduled to meet with Nevada’s Financial Institutions Division, that executive allegedly started a chat thread with Klippsten on an encrypted messaging platform. The messages were set to auto-delete after 24 hours. That regulatory meeting would ultimately help trigger the custodian’s shutdown.
Three days later, on May 25, 2023, one day before the Nevada FID meeting, Swan Bitcoin formally notified Prime Trust that it was moving its entire business away from the custodian. Two days later, May 27, Swan transferred 10,080 Bitcoin in a single movement.
Prime Trust then met with Nevada regulators and were forced to shut down. On August 14, 2023, Prime Trust filed for Chapter 11 bankruptcy. Thousands of customers were left unable to access their funds. Early filings indicated the company owed as much as $82 million to customers from missing fiat deposits alone.
The complaint argues the timing was not a coincidence. A Prime Trust executive was allegedly working at a company about to implode while also being paid as an advisor to Swan. That dual role created exactly the kind of information advantage bankruptcy law is designed to examine.
The encrypted messages. The auto-delete setting. The full transfer notification submitted the very next day. Swan’s lawyers will have answers for all of it. Clients should be asking their own questions too.
Swan has not directly addressed the specifics of the encrypted communications timeline. Its defense is structural. Customer assets in individual trust accounts, Swan argues, should be shielded from bankruptcy clawback no matter when they were moved. That argument may have legal merit. It is also an argument about account structure, not about the timeline itself.
For anyone with assets at Swan Bitcoin, the word “clawback” deserves close attention.
In bankruptcy law, a clawback, formally called a preferential transfer recovery, allows a bankruptcy trustee to reclaim assets transferred out of a company within a specific window before it filed for bankruptcy. The logic is simple. If a company is insolvent and some creditors or clients got their money out while others did not, the bankruptcy estate can try to claw those funds back and redistribute them more equitably.
That is exactly what the PCT Litigation Trust is attempting. The complaint cites the 90-day preference period before Prime Trust’s August 14 bankruptcy filing, placing Swan’s major transfers squarely inside that window.
The issue gets more complicated for Swan’s current clients. If Swan Bitcoin itself ever faced a serious financial or legal crisis, an unlikely but no longer unthinkable scenario given the scale of this litigation, similar clawback questions could theoretically apply to assets Swan holds for its own customers. The question of whether customer assets are truly segregated from a platform’s legal liabilities is not always as clean as company marketing materials suggest. Investors comparing platforms may want to examine how a Crypto IRA structures asset segregation before assuming any one model is the safest.
Swan says customer assets are held in individual trust accounts and insulated from creditor claims. Bankruptcy proceedings are unpredictable, lawyers are expensive, and outcomes are never guaranteed, especially in complex crypto custody disputes that have already dragged on for years.
The point is simple. If you have assets on a platform facing a near-billion-dollar lawsuit, you should know exactly how those assets are held, what legal protections apply, and what happens to your access if the situation gets worse.
One of the least-discussed risks in crypto custody disputes is time. Legal battles involving hundreds of millions of dollars, multiple jurisdictions, competing readings of bankruptcy law, and well-funded legal teams do not resolve in weeks or months. They resolve in years.
The Prime Trust bankruptcy has already stretched more than two and a half years. Thousands of Prime Trust customers are still waiting. The adversary complaint against Swan Bitcoin, filed in May 2026, is at the beginning of its legal journey, not the end.
During complex litigation, assets can be frozen, accounts can be restricted, and access to funds can become limited. That can happen without warning. It can also happen for reasons entirely outside a client’s control. A court order freezing specific assets pending resolution of a clawback claim is a real possibility in a case like this.
Swan Bitcoin has not indicated that any customer accounts are currently affected. The broader point still stands. When a financial platform is in the middle of major litigation, the timeline for resolution is measured in court calendars, not client convenience.
Here is where the story turns from serious to deeply awkward.
Among the assets the PCT Litigation Trust is seeking to recover from Swan Bitcoin are 91,144 XRP, approximately $126,000 worth of the Ripple-linked token. XRP is the same token Cory Klippsten has described, publicly and repeatedly, as part of a “criminal game of securities fraud.”
Klippsten’s public statements about XRP and Ripple amount to one of the most aggressive anti-XRP campaigns run by any executive in the industry.
Swan’s legal position is that these were customer assets held in custodial accounts, not Swan’s own corporate holdings. That may be true. It still creates a question the company has not publicly answered. If Swan is a Bitcoin-only platform, why were XRP tokens accumulating in accounts held in its name at all? What was the internal policy? Was there one?
A CEO who spent years calling XRP a criminal fraud was running a company that, according to the court filing, had 91,000 of them sitting in accounts under its name. The lawyers will sort out whose tokens they were. The public relations problem is harder to solve.
There is another layer of irony Swan has never fully reckoned with. In September 2023, just as Swan was scrambling for a new custodian after leaving Prime Trust, Ripple announced it was acquiring Fortress Trust, which had become Swan’s primary new custody partner. The CEO who called Ripple a criminal enterprise was, through his custodian, now effectively doing business with it. Ripple ultimately backed out of the Fortress Trust acquisition after a $12 million to $15 million hack at Fortress Trust was publicly revealed. The episode showed the gap between Klippsten’s public rhetoric and the realities of operating in an interconnected financial system.
The Prime Trust lawsuit is the most consequential legal challenge Swan Bitcoin currently faces. It is not the only one.
In September 2024, Swan filed suit against a group of former employees and contractors, accusing them of executing what Swan called a “rain and hellfire” plan to steal its Bitcoin mining operation. The lawsuit alleged that six employees looted Swan’s trade secrets, including proprietary software code, hash-rate optimization techniques, and financial models, then used them to launch a competing mining company called Proton Management.
The lawsuit also implicated Tether, the stablecoin issuer and Swan’s one-time funding partner. Swan alleged that Tether provided financial backing for the scheme. Swan also alleged that the day after the mass resignation of the accused employees, Tether’s lawyers served Swan with a “Notice of Event of Default,” claiming Swan had breached their mining partnership because it could no longer “maintain the personnel necessary” to conduct business.
Swan called it coordinated corporate sabotage. As of this writing, a federal judge has stayed the lawsuit while the Ninth Circuit Court of Appeals reviews whether the case belongs in arbitration. The proceeding is frozen in its own legal limbo with no resolution in sight.
Amid all of this, it is worth pausing to examine what Swan Bitcoin clients pay for the privilege of holding Bitcoin on the platform.
Swan overhauled its fee structure in 2025 with the introduction of Swan Guard, a tiered custody system. Under current pricing, effective July 1, 2025, Swan charges clients 0.03% of assets on platform, or AOP, per month for its Swan Safe custody tier. That works out to $3 per month on every $10,000 of Bitcoin held, every month, indefinitely.
For Swan Vault accounts, the higher-tier custody product, the fee is 0.02% AOP per month, with a minimum monthly charge of $30 and a maximum of $500. A client with a relatively small balance owes at least $360 per year simply to keep their Bitcoin stored on Swan’s platform.
For clients weighing their options, this is a layered cost structure. There is a monthly percentage fee, a minimum floor, and a transaction fee. All of it is attached to a platform currently facing two active lawsuits and a $970 million clawback claim. Those are facts worth modeling before assuming Swan is the safe, low-cost choice it once positioned itself to be.
None of this is a verdict. Swan Bitcoin has not been found liable. Its legal arguments may prevail. Courts are unpredictable, and bankruptcy law is genuinely complex.
The purpose of investigative financial reporting is not to deliver a verdict. It is to surface the facts clients deserve before deciding where to put their money and their trust. Every current and prospective Swan Bitcoin client should be sitting with these questions.
Is your Bitcoin actually secured if this lawsuit goes badly? Swan says customer assets are held in segregated trust accounts and insulated from creditor claims. Ask for that commitment in writing. Request the custodial agreement and have someone who understands bankruptcy law review it before taking Swan’s word for it.
What happens to your account access during years of litigation? Court proceedings of this scale take years. During that time, assets can be frozen or restricted. What is Swan’s plan if a court order restricts movement tied to its accounts? Does Swan have a client communication protocol for that scenario?
Why were there 91,000 XRP in Swan-linked accounts? If Swan is truly Bitcoin-only, clients deserve a full accounting of why tens of thousands of units of a token its CEO publicly called a criminal fraud were held in its name at Prime Trust.
What is Swan’s actual financial position? Swan is not a public company. It does not disclose its balance sheet. A $970 million judgment, even a partial one, would be among the largest in crypto custody history. Do you know whether Swan has the financial resilience to absorb that?
Are the fees worth the risk? A $30/month floor fee, 1% on every transaction, and an ongoing percentage of assets held. All of it is attached to a platform navigating two simultaneous lawsuits. Is Swan still the right home for your Bitcoin?
Swan Bitcoin was built on a simple, powerful premise. Bitcoin is the only asset worth holding, and Swan is the only company worth trusting with it. For investors exhausted by altcoin mania and platform failures, that message resonated.
A Bitcoin-only investment philosophy does not protect a company from human error, legal risk, or structural weakness.
Swan clients were told they were in the safest hands in crypto. The courts are now being asked to decide what “safe” actually meant.
Klippsten has never been shy about questioning the integrity of others in this industry. The next few years in Delaware Bankruptcy Court will give the rest of the world a chance to form its own opinion about Swan.
