The PCT Litigation Trust, created under Prime Core Technologies' confirmed Chapter 11 plan, has filed a 94-page adversary complaint against Electric Solidus, Inc., the parent entity operating as Swan Bitcoin, in the U.S. Bankruptcy Court for the District of Delaware. According to recent reports, the complaint was filed on May 15, 2026, seeking to recover approximately 11,994 Bitcoin (worth roughly $938 million at current prices), $24.66 million in cash, approximately $5 million in stablecoins including USDT and USDC, and 91,144 XRP — totaling approximately $970 million. The case is assigned to Judge J. Kate Stickles under Adversary Proceeding No. 26-50331. The trust alleges that Swan used insider information from an encrypted chat to pull its assets out of the collapsing custodian weeks before other customers and creditors knew the firm was insolvent.
The complaint centers on what the trust describes as an insider tip delivered through a disappearing messaging channel. According to the filing, a senior Prime Trust executive who also served as a compensated outside advisor to Swan — and who reportedly lived near Swan CEO Cory Klippsten — initiated an encrypted chat thread with Klippsten on May 22, 2023. The executive immediately set the chat to auto-delete messages after 24 hours, beginning four days before a critical meeting between Prime Trust and the Nevada Financial Institutions Division (FID) that would ultimately trigger the custodian's regulatory shutdown. The trust alleges that a ledger entry labeled "PT FBO Swan Customers" was created on May 25, 2023, to give the false appearance that Swan's assets had been held in segregated accounts for the benefit of Swan's customers the entire time. The timing is notable as the entry was created one day before Prime's meeting with Nevada regulators and days after the alleged encrypted communication began. The next available notification between the executive and Klippsten appeared on May 27, 2023 — the day after the Nevada FID meeting and the same day Swan transferred 10,080.1085 BTC from Prime.
Swan has disputed the litigation trust's theory in prior court filings and in a statement to Blockspace. According to Swan's representative, "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." This defense frames the dispute around whether the assets belonged to Swan, Swan customers, or the Prime Trust bankruptcy estate. The trust argues that during the 90-day preference window before Prime's August 14, 2023 Chapter 11 filing — specifically between May 16 and August 14, 2023 — Swan withdrew massive volumes of BTC, cash, stablecoins, and XRP while the custodian was insolvent. The trust acknowledges that Swan contributed some new value during the preference period, approximately 1.44 BTC and $2.22 million in cash, but argues the net transfers heavily favored Swan at the expense of the bankruptcy estate.
Prime Trust's collapse began in 2023 after Nevada regulators said the custodian was insolvent and could not meet customer withdrawal requests. The company lost access to a wallet holding approximately $80 million and reportedly used customer funds to cover front-facing withdrawals. Prime Trust carried fiat liabilities exceeding $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 August 14, 2023. Interim CEO Jor Law cited excessive spending, risky investments including a failed stablecoin venture, and a loss of customer trust as the primary causes. Prime Trust was one of the most widely used custody providers during the 2021–2023 cycle, serving as the backend for dozens of crypto companies, including Swan, Strike, Compass Mining, Fold, and Galaxy Digital.
A July 18, 2025 ruling by Judge Stickles determined that assets in Prime's possession at the time of filing were part of the bankruptcy estate due to commingling and contractual terms. This decision enabled the Plan Administrator to treat partner assets as estate property, with certain carve-outs reserved for parties including Swan during earlier proceedings. The PCT Litigation Trust has filed similar clawback actions against other former Prime partners, including Strike, Compass Mining, Fold, and Galaxy Digital. How the Delaware Bankruptcy Court rules on Swan's fiduciary and preference defenses will likely shape outcomes across several related actions still working through the docket. The case is being closely watched by the broader crypto custody industry, as it could establish precedent for how customer assets held by failed custodians are treated in bankruptcy — a question that has implications far beyond Prime Trust. If the trust prevails, transfers to third parties (even customer-facing entities like Swan) within the 90-day preference period become recoverable, dramatically increasing counterparty risk for all crypto custodians. This would mean companies like Strike, Compass Mining, Fold, and Galaxy Digital — also named in related filings — could face similar clawback exposure.
