Tether Initiates Legal Proceedings Against Swan Bitcoin
Tether, a prominent player in the stablecoin industry, has taken legal action against Swan Bitcoin in the High Court of England and Wales. The lawsuit, aimed at protecting Tether’s investment, comes in response to alleged breaches of agreements by Swan.
Reasons Behind the Lawsuit
- Tether claims that Swan Bitcoin acted recklessly, leading to significant breaches of their agreements.
- The stablecoin issuer felt compelled to take legal action to safeguard its investment.
The Short-Lived Partnership
The collaboration between Tether and Swan Bitcoin started in May, with Tether venturing into Bitcoin mining through Swan’s Managed Bitcoin Mining service. However, the partnership soured in July when Swan abruptly ended its mining business and IPO plans without explanation.
Allegations and Fallout
- Swan Bitcoin accused former employees of stealing trade secrets to start a competing mining operation at Tether’s direction.
- Tether’s advisor, Zach Lyons, was implicated in encouraging employees to leave Swan and creating a rival company.
- The collapse of Swan’s mining unit, cancellation of IPO plans, and layoffs followed, with promised funding from Tether not materializing.
Escalation of Conflict
While Tether denies wrongdoing in Swan’s lawsuit against former employees, the recent legal action signifies a further deterioration of relations between the two companies. This conflict highlights the challenges faced by both parties in maintaining a fruitful partnership.