Key Points
- A federal court application has been submitted by Swan Bitcoin to obtain subpoenas targeting Cantor Fitzgerald and its ex-CEO Howard Lutnick.
- The subpoena motion connects to pending litigation concerning a collapsed Bitcoin mining partnership involving Tether.
- Swan Bitcoin contends that departed employees misappropriated proprietary information before establishing Proton Management.
- According to the company, these former staff members convinced Tether to terminate their partnership and back the competing venture.
- Cantor Fitzgerald had served in an advisory capacity to Tether regarding its cryptocurrency mining expansion strategy.
A cryptocurrency company has petitioned a federal court for permission to issue subpoenas directed at Cantor Fitzgerald and its previous chief executive Howard Lutnick. The legal motion aims to secure documentation connected to a defunct Bitcoin mining partnership and conflict with former team members. This discovery request forms part of active litigation concerning accusations of data misappropriation and the establishment of a competing enterprise.
Federal Court Application Targets Financial Firm and Former Executive for Mining Project Documentation
On Monday, Swan Bitcoin submitted an ex parte motion to the Southern District of New York. The application requests judicial approval to compel Cantor Fitzgerald and Howard Lutnick to produce relevant documents. Swan Bitcoin asserts these parties possess records pertaining to its mining collaboration with Tether and 2040 Energy. The firm maintains these materials are essential to understanding the circumstances surrounding employee resignations and suspected data removal.
The legal action against multiple former employees was initiated by Swan Bitcoin in September 2024. The lawsuit contends that these individuals extracted confidential company materials, submitted resignations, and quickly established Proton Management. Swan Bitcoin further alleges they influenced Tether, a key financial partner, to abandon the existing arrangement and instead support their newly formed company. The accused parties have rejected these allegations, asserting that 2040 Energy received complete funding from Tether.
In its court submission, Swan Bitcoin noted that Cantor Fitzgerald provided strategic guidance to Tether for its Bitcoin mining growth initiatives. The filing characterizes Cantor as serving in an investment banking role for Tether. Swan Bitcoin suggests that Cantor possessed knowledge of the transfer of its mining operations to a Tether-affiliated entity. The company contends this transaction occurred at a significantly reduced valuation.
Legal Battle Focuses on Coordinated Departure Strategy and Public Offering Discussions
According to Swan Bitcoin’s allegations, Michael Holmes and Raphael Zagury orchestrated what the company refers to as the “rain and hellfire” strategy. Holmes previously held the position of head of business development at Swan. Zagury functioned as Swan’s former chief investment officer before assuming the CEO role at Proton. Swan Bitcoin asserts these individuals coordinated the mass departure and subsequent business transition.
The filing also references preliminary conversations with Cantor Fitzgerald regarding a possible initial public offering. Swan Bitcoin indicated that CEO Cory Klippsten held a meeting with Lutnick during June 2024. The company states it disclosed a “highly confidential and proprietary slide deck” throughout these negotiations. Swan Bitcoin additionally provided Cantor representatives with tours of its mining operations.
Klippsten subsequently posted on X that “after the mass resignations and asset diversion, Cantor broke off contact with Swan without explanation.” Cointelegraph reached out to Cantor Fitzgerald for a statement but has not yet received a reply. Lutnick currently holds the position of US Secretary of Commerce. Democratic Senator Elizabeth Warren has raised concerns regarding potential conflicts of interest related to his connections with Tether.
The litigation targeting Proton Management continues to progress through the judicial system. The former employees maintain their innocence as the case proceeds. The subpoena request now awaits judicial review in the Southern District of New York.
