Key Points:
- Tether filed a lawsuit against Swan Bitcoin, alleging breaches of agreements related to their 2022 Bitcoin mining joint venture.
- Swan Bitcoin faced accusations of misappropriating trade secrets to form a rival firm, Proton Management.
According to CryptoSlate, Tether, the company behind the USDT stablecoin, has filed a lawsuit against Bitcoin financial services firm Swan Bitcoin for egregious breaches of their joint venture agreements.
Read more: Tether Bitcoin Reserve Receives 7,629 BTC From Bitfinex
Tether Sues Swan Bitcoin Over Agreement Breaches
The dispute is about their 2022 partnership to develop 2040 Energy, a Bitcoin mining project. Tether claims Swan’s negligent behaviour torpedoed the venture and thus filed the lawsuit in the High Court of England and Wales. The company joined the legal action with 2040 Energy Limited as a co-claimant.
“Swan has acted recklessly and their actions have resulted in significant breaches by them of the agreements between us. Consequently, we have been compelled to take necessary measures to protect our investment,” Tether said in a statement.
Bitcoin Mining Partnership Falls Apart as Lawsuit Ensues
The deal kicked off in May 2022, when Tether invested in Bitcoin mining activity operated by Swan. By July this year, the collaboration had soured, with Swan suddenly shutting down its mining business without clear explanations and suspending its IPO plans.
Things went from bad to worse after Swan accused its former employees of conspiring to steal trade software and financial models and set up a rival firm called Proton Management.
Key figures involved in the fallout include Michael Holmes, Swan’s former business development head, and Raphael Zagury, the ex-chief investment officer who is currently CEO of Proton. Swan also accused Tether’s advisor, Zach Lyons, of encouraging employees to quit and undermining Swan’s leadership to pave the way for Proton.
Swan Bitcoin CEO Cory Klippsten brushed off concerns over the legal dispute, saying the company is “doing great and growing fast.”
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