On December 18th all legacy Swan Personal accounts (Fortress) will be archived and all client assets will automatically be transferred to upgraded Swan account (Bakkt) by December 20th.
According to the latest Fortress Trust announcement on or about December 11th, they will charge some Swan clients “a transfer fee of 1% of account assets or up to $175 for each account termination or transfer.” This fee should be less than the currently locked $125 for most accounts, which hold modest balances, but up to $175 for larger accounts. We expect this to be complete by December 20th.
Fortress has directed that clients that have any questions about this fee should contact Fortress directly, and not Swan, at support@fortresstrust.com.
Why is Swan switching platforms for its financial operations?
As a technology company, Swan partners with regulated financial institutions to handle client funds. Swan does not receive or handle client funds at any time.
More than a year ago, Swan embarked on a journey to create relationships with multiple partners for resiliency and optionality to expand its business. Today, we work with five different financial institution partners for various services provided to our clients.
At this time, we have determined that some of our newer partners would better serve our clients and their needs. This has led to Fortress resigning as custodian and appointing our new partners as successors.
How do I know if my account is affected by the platform transition?
Since mid-February this year, all Personal accounts at Swan are already onboarded to our new platform partner for Personal accounts, Bakkt, and not Fortress. They are not affected by this transition.
Affected clients will see an account labeled “legacy” in their apps. Corporate accounts, IRA accounts, and International accounts are also affected by the transition.
Do I need to take action?
No action is required for Personal and Entity accounts. Such accounts will automatically transfer to our new platform partner, Bakkt, a public company majority-owned by Intercontinental Exchange (the parent of the New York Stock Exchange).
No action is required for IRA accounts. Such accounts will transition to Equity Trust, a 50-year-old family-owned trust company that has been in the IRA business since 1983.
Action is required for International clients. Such clients should withdraw their Bitcoin and dollars off the platform as soon as possible. International Swan accounts will be closed on December 18th, and after December 20, international clients will need to work directly with Fortress. Fortress Trust has indicated they will liquidate any funds left over, and a check will be sent for the remaining balance.
Swan clients with non-IRA accounts have always been encouraged, and continue to be encouraged, to take advantage of free and automatic withdrawals to withdraw their assets to self-custody at any time.
Private clients can check in with their representatives for any additional guidance.
Where are the terms governing my agreement with Fortress Trust?
All Swan clients execute agreements with one or more regulated financial institutions when opening a Swan account. The agreement between you and the financial institution governs how funds are handled, while the Swan terms of service govern how Swan provides technology products to you. For your convenience, you can find the terms you agreed to when signing up for the financial institution account on the settings tab inside the legacy account, available at the top of your web dashboard at https://app.swanbitcoin.com.
Why does Swan partner with custody service providers instead of managing custody itself?
Separation of brokerage and custody is the historical model for financial services, and the requirement to use qualified custodians for safeguarding assets exists for good reason. It provides an added layer of protection and transparency for clients. Such practice is expected to become a standard in the Bitcoin industry and is already required for specific account types, like IRAs and institutional accounts.
For example, FTX's downfall in 2022 underscored the dangers of combining brokerage, exchange, and custody under one roof. FTX misused customer funds that were supposed to be securely held, leading to billions in losses and the erosion of trust in the industry.
At Swan, protecting our clients' Bitcoin is our highest priority. Partnering with world-class financial institutions like BitGo, Bakkt, and Equity Trust ensures your assets are held with providers specializing in secure, compliant custody services. This approach allows Swan to focus on providing the best Bitcoin product experiences while leveraging the expertise and infrastructure of industry-leading financial institutions to safeguard your coins and interface with the fiat system.