Tether Sues Swan Bitcoin Over Alleged Breaches in Joint Bitcoin Mining Venture
Tether Sues Swan Bitcoin Over Alleged Breaches in Joint Bitcoin Mining Venture - Ecoinimist Tether, the issuer of the world’s largest stablecoin by market capitalization, has taken legal action against Bitcoin financial services company Swan Bitcoin, accusing the firm of “significant breaches” in their business agreements. The lawsuit, filed jointly with co-claimant 2040 Energy, has been submitted to the High Court of England and Wales, marking a significant escalation in the conflict between the two companies. A Disputed Bitcoin Mining Partnership The dispute centers around 2040 Energy, a Bitcoin mining venture established in 2022 by the stablecoin issuer and Swan Bitcoin. Under the partnership, Tether provided funding while Swan oversaw operations. However, tensions arose after allegations surfaced that former Swan employees misappropriated trade secrets to form a rival company, Proton Management. Also read: FTX to Begin $1.2 Billion Repayments, Sparking Industry-Wide Anticipation According to Swan, its ex-employees, including Michael Holmes (former head of business development) and Raphael Zagury (former chief investment officer and mining head), orchestrated a scheme dubbed “rain and hellfire” to undermine Swan’s role in the venture. Zagury now serves as the CEO of Proton Management. Court filings allege that Proton used stolen proprietary information, including software code and business strategies, to establish itself as a direct competitor. Furthermore, Swan claims that Proton persuaded Tether to sever ties with Swan and support Proton’s efforts in the mining business. In August 2024, Swan CEO Cory Klippsten was removed from his role at 2040 Energy, and Proton took over operational and administrative control of the mining operations. Swan has described these events as a “hostile takeover” orchestrated by Tether. Tether Responds Tether has firmly denied Swan’s allegations, asserting that its actions were in accordance with contractual agreements. In a September 2024 statement, the firm emphasized its commitment to acting in good faith throughout its dealings with Swan. “Tether is aware of recent allegations made in a lawsuit that mentions a subsidiary of Tether dedicated to proprietary mining and other investments. While Tether is not a named defendant in the case, we have taken note of the claims and deny any implications of wrongdoing,” the company said. Also read: Altcoin Trading Volume on Binance Hits 78% as Experts Predict 2025 Bull Market Legal Fallout The fallout from the dispute extends beyond the partnership itself. Swan Bitcoin launched a separate lawsuit in November 2024 against its legal counsel, Gibson, Dunn & Crutcher, accusing the firm of malpractice. Swan claims the law firm abandoned its case against Proton after taking on Tether as a client, creating a conflict of interest and violating ethical standards. Swan CEO Cory Klippsten described the situation as a betrayal that caused significant damage to Swan’s mining business.