The litigation arm of Prime Trust's bankruptcy estate filed a 94-page adversary complaint on May 15, 2026, seeking to recover approximately $970 million in assets-making this one of the largest crypto clawback suits ever filed. The complaint targets Electric Solidus, Inc., the parent entity operating under the Swan Bitcoin name, in the U.S. Bankruptcy Court for the District of Delaware.
The bulk of the claim-roughly $938 million-consists of 11,994.08 BTC that Swan allegedly withdrew during the 90-day preference window before Prime's August 2023 bankruptcy filing. Beyond bitcoin, the trust is seeking $24.66 million in cash, roughly $5 million in stablecoins, and 91,144 XRP.
These withdrawals allegedly occurred between May 16 and August 14, 2023-precisely the 90-day preference window before Prime's Chapter 11 filing. The trust acknowledges Swan contributed approximately 1.44 BTC and $2.22 million in cash during that period, but argues the net exposure remains significant. The case is assigned to Judge J. Kate Stickles, and Swan has not yet filed a formal response.
The Alleged Tip-Off: How Swan Learned of Prime's Distress
The complaint's most damaging allegation centers on a coded message that allegedly gave Swan Bitcoin advance notice of Prime Trust's regulatory trouble. According to the filing, a senior Prime executive who also served as a paid Swan advisor contacted CEO Cory Klippsten four days before Prime's critical meeting with Nevada regulators on May 22, 2023. The executive initiated a chat on an encrypted messaging platform and immediately set it to auto-delete messages after 24 hours.
The timeline places the tip-off squarely before Swan's massive withdrawal. The next available notification between the two parties appears on May 27, 2023-the day after the Nevada FID meeting and the same day Swan transferred 10,080 BTC from Prime Trust. That message shows the executive had turned off the auto-delete feature, reopening the communication channel the same day Swan transferred 10,080.1085 BTC.
This sequence suggests Swan acted on non-public information about Prime's deteriorating condition. The complaint frames this as insider knowledge used to prioritize its own withdrawal ahead of other creditors. The timing-four days before the regulatory meeting that likely exposed Prime's distress-creates a direct causal link the trust will argue in court.
Swan's Defense: Trust Assets vs. General Creditor Claims
Swan Bitcoin's legal position rests on a straightforward principle: customer assets held by a trust company should remain segregated and unavailable to general unsecured creditors. A representative for Swan stated directly: "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" per a comment to Blockspace.
The case before Judge J. Kate Stickles in Delaware will turn on preference and fiduciary defenses-determining whether Swan's withdrawals during the 90-day window were proper returns of customer property or preferential transfers that must be returned to the estate as noted in the complaint details.
The complaint disputes Swan's framing, alleging the governing agreements between Swan and Prime Trust expressly disclaimed any fiduciary relationship, and that Prime created a "PT FBO Swan Customers" internal ledger designation on May 25, 2023-one day before its meeting with Nevada regulators-to give the false appearance that Swan's assets had always been held for the benefit of Swan's customers according to the complaint.
What Comes Next: Catalysts and Risk Scenarios
The procedural clock is now ticking. Swan has not filed a formal response as of May 18, 2026, though the deadline to answer the 94-page complaint will arrive within weeks. The case is assigned to Judge J. Kate Stickles in Delaware, and the first major catalyst will be Swan's formal response-likely including a motion to dismiss on trust asset protection grounds as noted in the complaint details.
The stakes extend far beyond Swan. Prime Trust's estate has filed similar clawback suits against Strike, Compass Mining, Fold, and Galaxy Digital per the complaint details-creating real risk of inconsistent rulings across parallel cases. If other crypto firms settle rather than fight, it could weaken Swan's position. Conversely, if multiple courts reject trust asset claims, the estate's recovery strategy collapses.
For investors, four watchpoints matter most. First, Swan's formal response and any motion to dismiss will signal how aggressively the company will defend the trust asset argument. Second, discovery on the encrypted chat communications could either validate or undermine the insider tip allegation. Third, watch how other crypto firms respond to similar claims-settlements would suggest weakness in their legal position. Fourth, and most consequential, is the court's interpretation of trust asset protection in crypto contexts. A ruling favoring the estate could reshape how custodial relationships are treated across the entire industry.