Prime Trust’s estate has sued Strike, claiming the Bitcoin payments company withdrew nearly $29.5 million and 1,939 Bitcoin just weeks before Prime Trust went bankrupt. The lawsuit is now raising questions about whether some crypto firms saw the collapse coming early and quickly moved funds to protect themselves
According to the newly filed complaint, Strike allegedly withdrew nearly $29.5 million and 1,939 Bitcoin from Prime Trust during the company’s final weeks before bankruptcy.
The filing specifically highlights a large 1,350 BTC transfer that reportedly took place on June 2, 2023, shortly before regulators moved against Prime Trust.
Prime Trust’s estate claims Strike executives recognized signs of serious financial and operational problems inside the custodian before the broader market became aware.
The lawsuit argues Strike received preferential treatment by rapidly moving customer funds away from Prime Trust while other users remained exposed to the platform’s collapse.
Court documents also referenced Strike’s own bankruptcy claim filing, where the company reportedly admitted taking actions “to protect its own and its customers’ interests” by transferring funds into external accounts.
Prime Trust was once considered one of crypto’s major custody and infrastructure providers, servicing exchanges, fintech platforms, and digital asset companies.
However, the firm collapsed in 2023 after Nevada regulators accused it of severe financial mismanagement, missing customer funds, and operational failures.
The company later entered receivership before filing for bankruptcy protection.
The collapse triggered widespread concerns across the crypto industry because many companies relied heavily on Prime Trust for custody, fiat settlement, and payment infrastructure.
Prime Trust’s estate is now seeking to claw back at least $13.9 million alongside roughly 1,758 BTC through the lawsuit.
The case centers around U.S. bankruptcy rules that prohibit companies nearing insolvency from favoring certain creditors or counterparties over others before collapse.
If the court sides with Prime Trust’s estate, the lawsuit could become another major precedent for how crypto bankruptcies handle large institutional withdrawals made shortly before insolvency events.
The legal battle also highlights growing risks around centralized crypto custodians, where operational transparency and liquidity management remain critical concerns for both institutional and retail users.
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