Informed Crypto News
Swan Bitcoin lawsuit targets former executives, implicates Tether
Headline, Swan Bitcoin lawsuit targets former executives, Implicates Tether published at 11.03 AM, September 27, 2024, on Protos.com. Swan Bitcoin has filed a lawsuit against proton management, a Bitcoin mining firm made up of former swan consultants, claiming that these executives hatched and executed a rain and hellfire plan to steal swan's mining business. Specifically, the suit alleges that several consultants who were a part of Swan's Bitcoin mining operation allegedly planned to misappropriate Swan's intellectual property to operate a copycat company that was also funded by Tether. The lawsuit includes an email that appears to show a discussion about how best to execute the exit and says, "Tether needs to send default notice." Subheading the timeline According to the lawsuit in June 2023, Swan Bitcoin CEO Corey Clipston learned of a Bitcoin mine in Australia that was trying to raise funding. He apparently discussed this opportunity with Giancarlo Devasini, the CFO of both Bitfinex and Tether, and the two agreed to form a joint venture with Swan providing management and Tether providing financing. Additionally, the lawsuit reveals that Tether, through BFX Ventures, had previously invested in Swan. The next month, then Chief Investment Officer for Swan, Rafael Zaguri, apparently began managing the Australian mining operations. This was helped by a group of consultants and employees, many of whom now work for proton. According to the lawsuit, near the end of July 2023, Tether subsidiary Zeta Hash entered into an agreement with Swan to create 2040 energy. This entity was funded by Tether and a poorly redacted portion of the lawsuit reveals that Tether also controlled 2040 Energy's Board of Directors. Clipston served as Swan's sole director on the 2040 Energy Board and Tether CFO Giancarlo Devasini and Ludovicus John van der Velde, the former CEO of Tether and current CEO of Tether's sister company Bitfinex, served as Tether's Directors on the 2040 Energy Board. In February 2024, Tether and Swan began planning 2140 energy to invest in a Tasmanian mining operation. However, this agreement didn't play out as imagined. Allegedly, the executives behind Swan's Bitcoin mining operation planned "rain and hellfire" by downloading the BNOC software, creating a company having Tether provide legal cover. In June 2024, Zack Lyons of Marlin Capital Partners, apparently a Tether advisor, allegedly communicated to Swan that Tether would be interested in investing in it. However, days later, Zagari communicated to Swan that Tether was not interested in most of Swan. It was interested in mining and suggested spinning that off. Several days later, Zagari suggested Tether effectively force Clipstein to resign as CEO and accept "win-down capital" in exchange for handing over the mining business. Later in July, Zagari and Devasini apparently met and decided to add Zagari to the Board of 2040 Energy and proposed moving 2040 Energy's Bitcoins to the custody of Zagari. Also in July, Swan announced layoffs and the end of its managed mining unit. In early August 2024, several of these executives began to resign. An email was subsequently sent from Tether's Council that claimed, "I understand that most or all of the Swan mining employees have resigned this morning. I have spoken with Tether and confirmed that these former employees were not encouraged to resign and have no existing arrangements with Tether." Based on another poorly redacted part of the filing, Tether's Council sent a notice of event of default to Swan's Council that claimed that Swan breached the 2040 Energy Shareholders Agreement, providing the planned legal cover against Swan for defendant proton to take Swan's place in 2040 Energy and potentially beyond. It claimed that the supposed events of default included Swan's alleged breach of the Shareholders Agreement because Clipstein provided no assurances that Swan will be able to maintain the personnel necessary for Swan to procure that the business of 2040 Energy is conducted in accordance with the investment memos and sound business practices and commercial principles. Days later, Clipstein resigned as CEO of 2040 Energy, in part because Tether had accused Swan, again his company, of breaching the Shareholders Agreement. Tether also apparently sent a notice of continuing and additional breach, alleging again that Swan had further breached the 2040 Energy Shareholders Agreement based on the resignations of a substantial number of Swan employees responsible for carrying out and overseeing the ongoing business operations of 2040 Energy. Read the full story on Protos.com. This recording was AI generated. Get more crypto news at Protos.com.