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Tether has filed a lawsuit against Swan Bitcoin, accusing the company of significant breaches in their joint venture agreements. The legal action, confirmed by Tether and co-claimant 2040 Energy on January 15, 2025, is the latest chapter in the ongoing conflict between the two companies.
The dispute traces back to the establishment of 2040 Energy in 2022, a Bitcoin (BTC) mining venture jointly created by Tether and Swan Bitcoin. According to court documents, Tether provided the necessary funding for the operation, while Swan Bitcoin was tasked with handling day-to-day operations. However, the relationship soured as Swan Bitcoin accused former employees of stealing proprietary information and using it to form a rival company, Proton Management.
These former employees, including Michael Holmes, Raphael Zagury, and others, allegedly sabotaged Swan Bitcoin’s role in the joint venture as part of a plan called “rain and hellfire,” according to Swan’s allegations. This led to the creation of Proton Management, a direct competitor to Swan.
In a twist, Proton Management allegedly convinced Tether to sever its ties with Swan Bitcoin and back the new competitor instead, leading to a significant shift in the control of 2040 Energy.
In response to the Tether vs Swan Bitcoin dispute and accusations, Tether has denied any wrongdoing and insists that it was simply exercising its contractual rights under the joint venture agreement. In a statement to Cointelegraph on September 27, 2024, Tether made it clear that it acted in accordance with the terms set out in the partnership:
“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,” said the company.
Despite Tether’s statement, the situation escalated further when Swan Bitcoin accused the firm of facilitating a “hostile takeover” of its mining operations, culminating in the removal of Swan Bitcoin CEO Cory Klippsten from his role at 2040 Energy on August 12, 2024. Proton Management took control of operational and administrative functions shortly after.
The Tether vs Swan Bitcoin dispute is not the only legal headache for Swan Bitcoin. In November 2024, the company launched a lawsuit against its law firm Gibson, Dunn & Crutcher, accusing it of malpractice. Swan Bitcoin claims the firm abandoned its case against Proton Management once it took on Tether as a client. The company argued that the law firm’s actions violated attorney ethics rules and caused significant damage to Swan Bitcoin’s business.
Cory Klippsten, the CEO of Swan Bitcoin, expressed frustration over the situation, saying, “Swan was blindsided” and describing Gibson Dunn’s move as a betrayal. Klippsten emphasized that the law firm’s decision to drop Swan led to irreversible harm to its mining business.
Despite Swan Bitcoin’s accusations, Tether remains firm in its position. In a statement provided to Cointelegraph, Tether emphasized that it had always acted in good faith, adhered to the agreements, and sought to protect its investment in the joint venture. However, the lawsuit suggests a deepening rift between the two companies, with Tether seeking legal recourse for what it claims are breaches by Swan Bitcoin.
The case filed in the High Court of England and Wales adds another layer of complexity to the dispute. Both parties are now embroiled in a legal battle that could have significant implications for the future of 2040 Energy and the relationship between Tether and Swan Bitcoin.
As the Tether vs Swan Bitcoin dispute unfolds, the outcome could reshape the business dynamics between these two companies and alter the future of their joint Bitcoin mining venture. Tether is likely to continue defending its position, asserting that it acted within the bounds of the agreement. Meanwhile, Swan Bitcoin will likely continue to pursue legal action to address what it sees as a breach of trust and a betrayal of the partnership.
The Tether vs Swan Bitcoin dispute is a stark reminder of the complexities of joint ventures in the cryptocurrency and Bitcoin mining industries. As the lawsuit progresses, it will be interesting to see how Tether and Swan Bitcoin navigate their legal challenges, and whether this dispute will have wider implications for the cryptocurrency market and future partnerships. Stay updated with the latest developments in the cryptocurrency industry through The BIT Gazette, offering comprehensive insights into current events shaping the sector.
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