A litigation trust created under Prime Core Technologies’ confirmed Chapter 11 plan filed a 94-page clawback suit in the U.S. Bankruptcy Court for the District of Delaware against Swan Bitcoin and its parent Electric Solidus, Inc. The trust seeks $970 million, targeting roughly 11,994 BTC valued near $938 million, plus about $24.66 million in cash, $5 million in stablecoins, and 91,144 XRP. The complaint alleges a Prime Trust executive tipped off Swan’s CEO via encrypted chat before Prime Trust’s collapse. Prime Trust allegedly became insolvent in 2023, lost access to a wallet holding about $80 million, used customer funds for withdrawals, and faced fiat liabilities exceeding $85 million. Nevada regulators issued a cease-and-desist order, placed Prime into receivership, and Prime filed for Chapter 11 on Aug. 14, 2023. The trust alleges Swan withdrew large crypto and cash amounts during the 90-day preference window before that filing while Prime was insolvent, despite some alleged new value contributions.
"PCT Litigation Trust filed a 94-page suit against Swan Bitcoin on May 15, 2026, seeking $970 million in clawbacks. The complaint alleges a Prime Trust executive tipped off Swan CEO Cory Klippsten via encrypted chat on May 22, 2023, weeks before the collapse. Swan has not filed a formal response as of May 18, 2026; the case before Judge Stickles will turn on preference and fiduciary defenses."
"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 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."
"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."
#crypto-clawbacks #bankruptcy-litigation #preference-actions #fiduciary-duty #prime-trust-insolvency
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