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#swanbitcoin

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⚯ Michel de Cryptadamus ⚯

A company called #SwanBitcoin that got in bed with #Tether a few years ago recently found out that was a bad idea when #Tether allegedly executed an extremely bad faith corporate takeover of their joint #bitcoin transaction processing¹ business citing an obscure clause in the more recent Swan/Tether agreement.

As a result Swan Bitcoin just sued Tether. Their filing redacted a bunch of stuff but the redaction was done incorrectly so the text could be easily unredacted. Here's a link to the PDF of the complaint along with screenshots of just the redacted sections (but unredacted) so you can see what they were trying to hide (or at least pretending to try to hide - I kind of suspect Swan did a bad job redacting on purpose so they could make Tether's involvement public while claiming to comply w/confidentiality requirements).

Complaint: storage.courtlistener.com/reca

¹ some call it #bitcoinmining

7. Four days later, Tether, Swan's funding partner in its mining operation, notified Swan that Defendant Proton would be taking over "day-to-day" Bitcoin mining management in their joint venture, citing the departure of a "substantial number of Swan employees responsible for carrying out and overseeing the ongoing business 11 operations." 61. Tether funded 2040 Energy and controlled 2040 Energy’s Board of Directors. Klippsten served as Swan’s sole director on the 2040 Energy board, and Tether CFO Giancarlo Devasini and Ludovicus Jan 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. 62. Like Swan’s employment and consultant agreements, the 2040 Energy Shareholders Agreement contains a broad confidentiality provision, which provides that: “[E]ach party hereby severally undertakes with each of the other parties and with [2040 Energy] not, at any time during the term of this Agreement or at any time thereafter, use or divulge or communicate to any person, (other than to his or its or the [2040 Energy’s] professional advisers (each of whom shall be bound by a duty of confidentiality) or on the instructions of the Board (acting with Investor Consent)) any Confidential Information.” Confidential Information under that Agreement includes but is not limited to information related to “customers, suppliers, business, assets, or affairs or plans, intention
101. Also on August 9, 2024, as the Defendants and Swan conspirators had planned and, on information and belief orchestrated, Tether’s counsel served upon Swan’s counsel a carefully timed and detailed “Notice of Event of Default,” dated that same day, baselessly claiming 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. For example, the supposed “events of default,” included Swan’s alleged breach of the Shareholders Agreement because Klippsten “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.” 102. On August 12, 2024, Klippsten was forced to resign as CEO of 2040 Energy because it was clear Swan (his company) was being pushed out of that funding arrangement; Tether had accused Swan (again, his company) of breaching the Shareholders Agreement; and based on his conclusion that Devasini and van der Velde, as the controlling directors of 2040 Energy, had played a role in stealing Swan’s mining team and business and were not acting in good faith. 103. Also on August 12, 2024, Tether’s c ounsel sent Swan “Notice of Continuing and Additional Breach,” alleging again that Swan had further breached the 2040 Energy Shareholders
104. In that August 12, 2024 notice, Tether’s counsel wrote further: “Tether has engaged on the date hereof [Defendant] Proton Management Ltd., which entity has represented that it can supply the services of certain former employees of Swan, to procure that the business of 2040 Energy is conducted in accordance with the investment memos previously provided by Swan and sound business practice and commercial principles.” With that, as Swan would later learn, Defendants’ and the Swan conspirators’ coup was complete—Defendant Proton, created by Defendant Holmes, led by CEO Zagury and CIO Defendant Naidoo had created an illegal facsimile of Swan’s Bitcoin mining business. 108. On August 13, 2024, Swan, through counsel, responded to the August 9 Notice of Event of Default and August 12 Notice of Continuing and Additional Breach. Swan “rejected” the claims “in their entirety” and explained why they were “entirely without merit.” Based on its nascent investigation, Swan’s counsel explained that the breach claims based on the Defendants’ and Swan conspirators’ resignations in particular “is galling.” Swan further notified Tether that evidence shows “Tether itself procured the Employee Resignations and has been engaged in a conspiracy with those former Swan employees to seal for Tether’s benefit Swan’s [B]itcoin mining business.” 110. On August 14, 2024, Tether’s counsel responded to Swan’s letter, requesting that Swan provide
115. On September 13, 2024, Tether’s counsel proposed written resolutions of the Board of Directors of 2040 Energy related to a Bitcoin wallet contract, nominally asking for Klippsten’s review and approval as a director. Among other things, the resolutions: a. Falsely represented that, on August 19, 2024, Swan “proclaimed” that it had resigned from its responsibilities for “day-to-day operations” over 2040 Energy “notwithstanding the Shareholders Agreement”; b. Represented again that 2040 Energy had appointed Defendant Proton “to provide day-to-day management services for the Company”; and c. Revealed that Zagury is the Chief Executive Officer of Defendant Proton, Defendant Naidoo is the Chief Investment Officer, and Effertz is the Chief Financial Officer. 116. Swan responded that Klippsten could not sign the resolutions because they were misleading: Swan’s “August 19th correspondence . . . did not, for example, ‘proclaim’ Swan’s ‘Resignation.’ As [Swan] made clear, Swan is not responsible for managing 2040’s day-to-day operations because, on August 13, 2024 (6 days earlier), Tether appointed Proton Management to manage 2040’s day-to-day operations. That appointment, as you know, was the culmination of Tether’s conspiracy with the former Swan affiliates and employees who formed and now work at Proton Management to steal Swan’s BNOC and bitcoin mining business (among other conduct). Zagury, who
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