In the latest legal drama concerning digital currencies, Tether has filed a lawsuit against Swan Bitcoin over alleged ‘significant breaches’ in a joint Bitcoin mining venture. Tether, along with co-claimant 2040 Energy, disclosed to Cointelegraph that they felt compelled to take legal action to protect their investment. Swan Bitcoin allegedly mishandled its role in the venture, resulting in serious violations of agreements between the parties.
The dispute germinated from a joint Bitcoin mining project, 2040 Energy, which was established by Swan and Tether in 2022. While Tether facilitated funding, Swan was responsible for operations according to Swan Bitcoin’s filings. Swan has claimed that ex-employees from its mining sector pilfered confidential information, such as software code and business strategies, to start a competing company, Proton Management.
According to Swan, the culprits were prompted by a plan they termed as ‘rain and hellfire’, aimed at undermining Swan’s role within the joint venture. This plan was reportedly executed by key personnel, including its former head of business development, Michael Holmes, and its erstwhile chief investment officer and mining head, Raphael Zagury, who currently is Proton’s CEO.
Swan levelled allegations against Proton claiming misuse of its trade secrets to establish themselves as a direct competitor, ultimately damaging Swan’s competitiveness in the market. An accusation was also made against Tether for supposedly facilitating a ‘hostile takeover’ of Swan’s mining operations. However, Tether has firmly denied any accusations of impropriety, maintaining that its actions were in line with the clauses of the joint venture agreement.
In a SEPARATE legal development, Swan Bitcoin initiated legal proceedings against its law firm, Gibson, Dunn & Crutcher, accusing it of malfeasance. Swan alleges that the firm discarded its case against Proton after agreeing Tether as a client, thereby violating attorney ethics rules which prohibit getting rid of a client to sidestep potential conflicts of interest.