Prime Trust Litigation Trust Files 94-Page Suit Against Swan Bitcoin for $970M in Transfers

Prime Trust Clawback Case Targets Swan Bitcoin

The PCT Litigation Trust, created under Prime Core Technologies’ confirmed Chapter 11 plan, filed the action in the U.S. Bankruptcy Court for the District of Delaware. The suit targets Electric Solidus, Inc., the parent entity operating under the Swan Bitcoin name.

At the center of the complaint is roughly 11,994 BTC, valued at approximately $938 million at recent prices. The trust also seeks to recover around $24.66 million in cash, $5 million in stablecoins including USDT and USDC, and 91,144 XRP.

Prime Trust, a Nevada-regulated crypto custodian, began showing signs of serious financial strain in 2023. The company lost access to a wallet holding approximately $80 million, reportedly used customer funds to cover front-facing withdrawals, and carried fiat liabilities of more than $85 million against roughly $3 million on hand.

Nevada regulators issued a cease-and-desist order in June 2023, placed Prime in receivership, and the company filed for Chapter 11 on Aug. 14, 2023. The PCT Litigation Trust alleges that during the 90-day preference window before that filing, specifically between May 16 and Aug. 14, 2023, Swan pulled large volumes of BTC, cash, stablecoins, and XRP from Prime while the custodian was insolvent.

The trust acknowledges Swan contributed some new value during that period, approximately 1.44 BTC and $2.22 million in cash, but argues the net exposure remains significant. A central allegation in the complaint involves what the trust describes as an insider tip. A senior Prime Trust executive who also served as a paid advisor to Swan and reportedly lived near Swan CEO Cory Klippsten, allegedly alerted Swan to Prime’s deteriorating condition.

The complaint points to an encrypted, auto-deleting chat that began May 22, 2023, days before a critical Nevada Financial Institutions Division meeting on May 26. The trust alleges Swan used that information to accelerate withdrawals ahead of other creditors and customers. Swan is said to have moved client assets to Fortress and Bitgo well before the firm’s collapse, completing transfers weeks in advance in June 2023.

The company said at the time the moves were related to system upgrades. The trust also challenges the legal structure of how assets were held. Governing agreements between Swan and Prime, including Order Forms, an API Agreement, and a Custodial Agreement, explicitly disclaimed fiduciary duties and allowed Prime to commingle assets.

The complaint alleges that a ledger entry labeled “PT FBO Swan Customers” was created on May 25, 2023, to give the appearance of segregation, days after the alleged insider communication began. A July 18, 2025, ruling by Judge J. Kate Stickles determined that assets in Prime’s possession at the time of filing were part of the bankruptcy estate due to commingling and the contractual terms of its agreements.

That decision enabled the Plan Administrator to treat partner assets as estate property, with certain carve-outs reserved for parties including Swan during earlier proceedings. Swan, however, has pushed back against the claims. The company has stated that Prime Trust held customer property in individually owned trust accounts, and that the bankruptcy estate is now trying to claim assets it held as custodian from a party that never received them.

Swan has objected to such claims in past filings, arguing that customer assets held by a trust company are not available to general unsecured creditors. The company said it expects the courts to agree. Still, no formal response to the May 15 complaint has been filed as of May 18, 2026. The case is assigned to Judge Stickles under Adversary Proceeding No. 26-50331.

The PCT Litigation Trust has filed similar clawback actions against other former Prime partners, including Strike, Compass Mining, Fold, and Galaxy Digital. Each case centers on similar questions about asset segregation, commingling, and preference transfers in the months before Prime’s bankruptcy filing.

How courts rule on Swan’s fiduciary and preference defenses will likely shape outcomes across several related actions still working through the Delaware docket.