On January 15, Tether escalated the conflict by filing a lawsuit against Swan in the High Court of England and Wales, citing significant breaches of agreements tied to their short-lived partnership.

In a public statement, Tether accused Swan Bitcoin of acting recklessly, claiming these actions severely violated their contractual agreements. According to Tether, the legal action was necessary to safeguard its substantial investment in Swan’s managed Bitcoin mining venture.

“Swan has acted recklessly, resulting in significant breaches of the agreements between us. Consequently, we have been compelled to take necessary measures to protect our investment,” Tether stated.

This legal battle, initiated by Tether alongside co-claimant 2040 Energy Limited, reflects a souring of relations that once appeared promising.

A Promising Partnership Turned Sour
In May 2024, Tether announced its entry into Bitcoin mining, leveraging Swan’s Managed Bitcoin Mining service. The partnership initially held great promise, with Tether investing heavily in the venture. However, by July, cracks began to appear as Swan abruptly ended its managed mining business, canceled its plans for an Initial Public Offering (IPO), and failed to provide clear explanations for these decisions.

The fallout created financial instability at Swan Bitcoin, which faced significant layoffs and lawsuits against former employees and consultants. Swan accused these individuals of conspiring to misappropriate proprietary trade secrets to form a competing mining operation, Proton Management. According to Swan, Tether’s advisor, Zach Lyons, played a pivotal role in undermining the company’s leadership and facilitating the collapse of its managed mining unit.

Tether Responds to Swan’s Claims
While Tether has denied any involvement in the alleged conspiracy, its lawsuit against Swan Bitcoin underscores the deep rift between the two firms. The $25 million funding Tether initially promised Swan reportedly failed to materialize, compounding Swan’s financial struggles.

Swan Bitcoin CEO Cory Klippsten has downplayed the controversy, stating that Swan is “doing great and growing fast,” despite the turmoil. However, this legal escalation further intensifies the scrutiny on Swan’s internal issues and the broader implications for its business operations.