Swan Bitcoin has filed an ex parte application in the Southern District of New York seeking to subpoena Cantor Fitzgerald and its former chief executive, Howard Lutnick, now serving as US secretary of commerce. The filing seeks discovery related to a failed Bitcoin mining venture and an alleged coordinated departure of former employees. Swan believes both parties hold documents relevant to its ongoing legal dispute.
The roots of the case trace back to September 2024, when Swan sued several former staff members, accusing them of stealing confidential documents before resigning and founding a competing firm called Proton Management. Swan alleged the ex-employees then persuaded Tether, a funding partner at the time, to sever ties with Swan and redirect its business to Proton instead. According to Swan, the former employees internally referred to this scheme as the “rain and hellfire” plan.
Swan alleges the plan was orchestrated by Michael Holmes, Swan’s former head of business development, and Raphael Zagury, Swan’s former chief investment officer, who subsequently became Proton’s chief executive. The defendants have previously denied Swan’s claims, arguing that the mining entity at the center of the dispute, 2040 Energy, was not theirs because it was fully funded by Tether. The case against Proton Management remains ongoing.
Swan’s subpoena application targets Cantor Fitzgerald and Lutnick because the company believes they possess key documents related to the 2040 Energy mining venture, the coordinated employee departures, and the alleged exfiltration of data. Cantor Fitzgerald serves as Tether’s investment banker and has advised the stablecoin issuer on its expansion into the Bitcoin mining industry, according to Swan’s filing. Swan further alleges that Cantor Fitzgerald likely had knowledge of what it describes as the undervalued sale of Swan’s crypto mining assets to a Tether subsidiary.
Swan’s chief executive, Cory Klippsten, met with Lutnick in June 2024, prior to the alleged events, as Swan was exploring an initial public offering and Cantor Fitzgerald had expressed interest in serving as its lead investment banker. During those discussions, Swan said it shared a confidential and proprietary slide deck with Cantor Fitzgerald and provided access to its mining facilities. Klippsten later stated on X that after the mass resignations and alleged asset diversion, Cantor Fitzgerald ended contact with Swan without providing any explanation.
The subpoena effort against Lutnick arrives amid broader scrutiny of his ties to Tether. Democratic senators, including Elizabeth Warren, have continued to press Lutnick over potential conflicts of interest connected to the stablecoin issuer since his appointment as commerce secretary. Cantor Fitzgerald did not provide an immediate response to a request for comment on the matter.
Originally reported by CoinTelegraph.
