Tether, one of the prominent players in the stablecoin industry, has taken legal action against Swan Bitcoin in the High Court of England and Wales, as per a recent statement shared with CryptoSlate. The lawsuit comes after Tether alleged that Swan Bitcoin had breached their agreements, prompting the stablecoin issuer to protect its investment.
According to Tether, Swan Bitcoin’s actions were deemed reckless and resulted in significant breaches of their agreements. As a result, Tether, along with co-claimant 2040 Energy Limited, decided to pursue legal measures to safeguard their investment.
In response to the speculation surrounding the lawsuit, Swan Bitcoin CEO Cory Klippsten reassured that the company was performing well and experiencing rapid growth. Tether, known for issuing USDT, the largest stablecoin in terms of market capitalization, had partnered with Swan Bitcoin, a financial services company specializing in digital assets.
The collaboration between Tether and Swan Bitcoin commenced in May, with Tether venturing into Bitcoin mining through Swan’s Managed Bitcoin Mining service. However, by July, the partnership came to an abrupt end when Swan Bitcoin discontinued its managed mining operations and halted its Initial Public Offering (IPO) plans without providing a clear explanation.
Subsequently, Swan Bitcoin faced challenges, including a legal dispute with former employees and consultants. The company alleged that these individuals conspired to steal trade secrets, such as proprietary code and financial models, to establish a competing mining venture called Proton Management. Swan Bitcoin accused Tether’s advisor, Zach Lyons, of playing a significant role in the incident by encouraging employees to depart from Swan, undermining its leadership, and facilitating the creation of Proton Management.
The fallout from these actions led to the collapse of Swan Bitcoin’s managed mining unit, the cancellation of its IPO plans, and substantial layoffs. Moreover, Tether’s promised $25 million funding did not materialize, exacerbating Swan Bitcoin’s financial woes.
While Tether is not directly implicated in Swan Bitcoin’s lawsuit against former employees, the stablecoin issuer has refuted any allegations of misconduct. The recent legal action signifies a further escalation in the dispute between the two companies, underscoring the strained relationship between them.
The initial report on this matter was first covered by Blockspace Media.