USDT stablecoin issuer Tether has failed to secure a
court order to block its former bitcoin mining partner, Swan Bitcoin, from
pursuing a lawsuit in California, the Financial Times reported. The UK High
Court dismissed Tether’s request for an injunction, marking another twist in
the deteriorating relationship between the two firms.
The legal dispute involves a collapsed mining venture
that once promised to expand cryptocurrency infrastructure but has since turned
into a courtroom battle over allegations of contract breaches and misuse of
proprietary information.
Tether, the issuer of the widely used USDT stablecoin,
and Swan Bitcoin reportedly formed a joint mining venture called 2040 Energy in June 2023.
The venture aimed to establish mining operations in locations such as Tasmania,
Norway, and Texas.
Failed Partnership Leads to Legal Disputes
According to court filings, Tether held an 80% stake in the company, while Swan owned the remaining 20%. However, financial
struggles and disputes over valuation led to a breakdown in their relationship.
Tether accused Swan of seeking outside funding from
crypto firm Ripple without its consent after it refused to inject additional
capital into the project. By August, the CEO of 2040 Energy, along with several
Swan employees and consultants, had resigned, further deepening the rift
between the companies.
In its UK filing, Tether argued that Swan Bitcoin
could gain access to sensitive business information through the California
lawsuit and use it for competitive advantage.
The company sought an injunction to prevent Swan from
continuing the case against six former employees, fearing that disclosures
could expose proprietary details about its operations. However, Judge Bright dismissed Tether’s concerns,
stating that Swan was unlikely to exploit any information gained from the
proceedings.
Swan Bitcoin’s Counterclaims in the US
While Tether filed a lawsuit against Swan Bitcoin in
January for alleged contract breaches, Swan launched its own legal challenge in
the United States. The firm accused former employees of orchestrating a
scheme to steal trade secrets and shift business operations to a rival firm,
Proton Management.
Although Tether is not directly named as a defendant,
court filings suggest the company “allegedly conspired” with Swan’s former
consultants to support the new company. With both lawsuits moving forward in different
jurisdictions, the conflict between Tether and Swan Bitcoin is far from over.
This article was written by Jared Kirui at www.financemagnates.com.
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