Swan Bitcoin Files to Subpoena Cantor Over Staff Dispute

TLDR

• Swan Bitcoin has submitted a court application to compel Cantor Fitzgerald and former CEO Howard Lutnick to provide testimony and documents.
• This subpoena request is connected to an ongoing legal battle concerning a failed Bitcoin mining venture that involved Tether.
• Swan Bitcoin asserts that former employees misappropriated confidential data and subsequently established a new company called Proton Management.
• The company alleges that these former employees influenced Tether to cease its partnership with Swan and instead support their new venture.
• Cantor Fitzgerald had previously provided advisory services to Tether regarding its expansion into Bitcoin mining.

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(SeaPRwire) –   Swan Bitcoin has petitioned a federal court for approval to issue subpoenas to Cantor Fitzgerald and its former CEO, Howard Lutnick. The request aims to obtain documents relevant to a failed Bitcoin mining venture and a dispute involving former employees. This discovery effort is linked to an ongoing lawsuit that alleges data theft and the creation of a competing firm.

Swan Bitcoin Targets Cantor and Lutnick Over Mining Venture Records

On Monday, Swan Bitcoin filed an ex parte application in the Southern District of New York. The company is seeking to subpoena Cantor Fitzgerald and Howard Lutnick for specific documents. Swan Bitcoin believes these entities possess records pertaining to its Bitcoin mining venture with Tether and 2040 Energy. The company contends that these materials are relevant to employee departures and alleged unauthorized data extraction.

Swan Bitcoin initiated a lawsuit against several former staff members in September 2024 concerning this dispute. The lawsuit claims that these employees absconded with confidential documents, resigned, and within days, formed Proton Management. Swan Bitcoin further alleges that they convinced Tether, a funding partner, to terminate its relationship with Swan and provide backing to their new company. The defendants have refuted these allegations, asserting that 2040 Energy was fully financed by Tether.

In its filing, Swan Bitcoin stated that Cantor Fitzgerald acted as an advisor to Tether on its Bitcoin mining expansion initiatives and served as Tether’s investment banker. Swan Bitcoin claims that Cantor Fitzgerald was likely aware of the sale of its mining assets to a Tether subsidiary, and that these assets were sold at a price below their actual value.

Dispute Centers on “Rain and Hellfire” Plan and IPO Talks

Swan Bitcoin alleges that Michael Holmes, its former head of business development, and Raphael Zagury, its former chief investment officer who later became CEO of Proton, orchestrated what the company termed the “rain and hellfire” plan. Swan Bitcoin claims these two individuals coordinated the employee exodus and the subsequent business transition.

The company also detailed previous discussions with Cantor Fitzgerald regarding a potential initial public offering (IPO). Swan Bitcoin stated that CEO Cory Klippsten met with Lutnick in June 2024 and that the firm shared a “highly confidential and proprietary slide deck” during these discussions. Swan Bitcoin also provided Cantor representatives with tours of its mining facilities.

Klippsten later 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 received no immediate response. Lutnick currently holds the position of US Secretary of Commerce. Democratic Senator Elizabeth Warren has previously questioned him regarding potential conflicts of interest related to Tether.

The lawsuit filed against Proton Management is still active in the courts. The former employees continue to deny any wrongdoing in the ongoing legal proceedings. The subpoena application is now awaiting review by the Southern District of New York.