Swan Bitcoin Subpoenas Cantor Fitzgerald Over Employee Data Theft

• Swan Bitcoin has filed a court application to subpoena Cantor Fitzgerald and its former CEO Howard Lutnick.
• The legal move is part of an ongoing lawsuit against former employees accused of stealing trade secrets to launch a rival firm, Proton Management.
• Swan claims Cantor Fitzgerald holds critical information regarding a diverted Bitcoin mining venture involving the stablecoin issuer Tether.

Allegations of the Rain and Hellfire Plan

In September 2024, Swan Bitcoin initiated a lawsuit against several former staff members, including former head of business development Michael Holmes and former chief investment officer Raphael Zagury. The company alleges that these employees executed a coordinated exit strategy dubbed the "rain and hellfire" plan.

According to the filings, the ex-employees purportedly stole confidential documents and proprietary data before resigning to establish Proton Management. Swan asserts that the group then successfully convinced Tether, a major funding partner for Swan's mining operations, to terminate its relationship with Swan and move its business to the newly formed competitor.

The Role of Cantor Fitzgerald and Howard Lutnick

Swan’s recent application in the Southern District of New York specifically targets Cantor Fitzgerald and Howard Lutnick, who now serves as the US Secretary of Commerce. Swan believes that the investment bank possesses key records related to 2040 Energy, the mining venture originally shared with Tether.

As Tether’s primary investment banker, Cantor Fitzgerald has been deeply involved in the stablecoin issuer’s expansion into the Bitcoin mining sector. Swan alleges that the bank likely had prior knowledge of the transfer of Swan’s mining assets to a Tether subsidiary at an undervalued price.

Disrupted IPO and Confidential Disclosures

Before the alleged theft occurred, Swan CEO Cory Klippsten met with Lutnick in June 2024 to discuss a potential Initial Public Offering (IPO). During these negotiations, Swan reportedly shared a "highly confidential and proprietary slide deck" and provided tours of its mining facilities to Cantor Fitzgerald representatives.

Key points regarding the breakdown of the relationship include:

• Cantor Fitzgerald expressed interest in being the lead investment banker for Swan's IPO.
• Following the mass resignations and the diversion of assets, the bank reportedly severed all contact with Swan without any explanation.
• Defendants from Proton Management have denied the claims, arguing that the 2040 Energy project was always owned by Tether as the sole financier.