Custodian Prime Trust transferred 12,000 bitcoins on the eve of its bankruptcy via Swan, now facing the largest clawback claim in crypto bankruptcy history

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The PCT Litigation Trust filed a lawsuit in mid-May, accusing the Bitcoin service provider Swan Bitcoin of using "insider" executives to obtain non-public information on the eve of the custodian Prime Trust's bankruptcy, allowing them to preemptively withdraw over 11,992 BTC, with total claims amounting to nearly $970 million. (Previous coverage: The US SEC may release a tokenized stock exemption framework as early as this week, allowing third parties to conduct on-chain transactions without issuer consent) (Background: Trump personally presided over the swearing-in ceremony of Fed Chair Walsh, the first time in 39 years that the White House has led the event) Lawsuit filed. A 94-page complaint has placed Swan Bitcoin in the defendant's seat in bankruptcy court. On May 15, 2026, the PCT Litigation Trust filed a lawsuit in the US Bankruptcy Court for the District of Delaware, alleging that Swan Bitcoin's parent company, Electric Solidus, used an "insider information channel" to preemptively withdraw nearly $970 million in assets on the eve of the 2023 collapse of the crypto custodian Prime Trust. These assets included 11,992 BTC (worth approximately $917 million at current prices), $24.66 million in cash, $5 million in stablecoins, and 91,144 XRP. The core argument of the complaint is clear and direct: "Swan, unlike most of Prime's clients, did not suffer significant losses because Swan possessed internal, non-public information. Swan knew to immediately withdraw its fiat and crypto assets before Prime filed for bankruptcy to avoid catastrophic losses." The complaint reveals a core link between Swan and Prime Trust: a Prime Trust "executive" also served as a paid external consultant for Swan and lived near Swan CEO Cory Klippsten. This dual role allowed the executive to pass confidential regulatory developments to Swan. According to the bankruptcy court filing, on May 22, 2023, just days before a regulatory meeting between the Nevada Financial Institutions Division (FID) and Prime Trust, the executive notified Klippsten via encrypted messaging. The complaint points out that "during the course of these communications, and the day before the meeting between Prime and the Nevada FID," on May 25, 2023, Swan formally notified Prime Trust of its intent to move all of its business operations away from Prime Trust. In bankruptcy legal practice, asset transfers occurring within 90 days prior to a company's bankruptcy can be deemed "preferential transfers" and may be clawed back by the bankruptcy trustee. The preference period for this case is from May 16 to August 14, 2023, and Swan's massive asset transfer falls exactly within this window. The complaint further alleges that Swan was not unaware of this risk but deliberately took action to circumvent it: "Swan recognized that moving its entire business away from Prime could expose it to massive preferential transfer liability. Therefore, Swan took steps to protect itself from such risks." The complaint does not disclose the specific methods of circumvention, but the wording clearly indicates that this was intentional rather than negligent. The collapse of Prime Trust was not without warning. In June 2023, Nevada regulators forcibly shut down the crypto custodian, citing that the company was heavily in debt and unable to repay client assets. In August of the same year, Prime Trust filed for Chapter 11 bankruptcy in Delaware. Early regulatory filings showed that it owed clients as much as $82 million due to a shortfall in fiat deposits. The lawsuit was filed by the PCT Litigation Trust, an asset liquidation and litigation recovery entity established specifically for the bankruptcy proceedings of Prime Core Technologies (Prime Trust's parent company), with the goal of recovering losses for creditors. The presiding judge is Judge Stickles of the Delaware Bankruptcy Court. Swan Bitcoin CEO Cory Klippsten strongly denied these allegations. He stated that the company's preparations to move its business from Prime Trust had been underway for nine months prior to the bankruptcy event and were not a result of insider information. Swan also argues that client crypto assets were held in separate trust accounts and, by legal nature, do not belong to Prime Trust's bankruptcy estate and therefore should not be subject to clawback. Currently, the case is in the early stages of litigation, and whether Swan truly possessed "insider information" remains to be clarified by the court. However, if the allegations in the complaint are proven true, this would be one of the largest preferential transfer clawback cases in the history of cryptocurrency bankruptcies and would have a profound impact on the industry's "custodian switching" practices.

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