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.
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.
