In response to Swan Bitcoin’s recent lawsuit, bitcoin mining firm Proton Management has claimed that Swan “does not have a mining business of its own,” effectively denying the legality of the suit.

Last week, Swan Bitcoin filed a complaint in the Central District of California that Proton “hatched and executed a ‘rain and hellfire’ plan to steal Swan’s” mining business. It accuses several of its former consultants of misappropriating Swan’s intellectual property to “copy” its operations at Proton.

However, in a written response filed on Monday, Proton claims that Swan didn’t have a mining business to copy in the first place. “Rather, as Swan admits in its complaint and publicly, what Swan has called its mining business is really just a separate entity called 2040 Energy, which is fully funded by Tether.”

Read more: We asked Swan CEO about layoffs, withdrawal times, and the canceled IPO

Proton’s response continues to state that Swan only holds a minority stake in 2040 Energy, and that the accused consultants voluntarily left Swan because of poor management, and just happened to go on to work for Proton.

“Swan has suffered no damage by Proton’s activities,” the response claims, and even states that the firm is “enhancing the value of [Swan’s] minority stake in 2040 Energy.”

Proton insists that no IP has been stolen and requests the case be dismissed, especially because the firm operates entirely overseas.

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The post Bitcoin mining firm Proton says Swan lawsuit ‘fatally flawed’ appeared first on Protos.

Swan Bitcoin has filed a lawsuit against Proton Management, a bitcoin mining firm made up of former Swan consultants, claiming that these executives “hatched and executed a ‘rain and hellfire’ plan to steal Swan’s” mining business. 

Specifically, the suit alleges that several consultants who were a part of Swan’s Bitcoin mining operation allegedly planned to misappropriate Swan’s intellectual property to operate a “copycat company” that was also funded by Tether.

The lawsuit includes an email that appears to show a discussion about how best to execute the exit and says, “Tether needs to send default notice.”

The Timeline

According to the lawsuit, in June 2023, Swan Bitcoin CEO Cory Klippsten learned of a bitcoin mine in Australia that was trying to raise funding. He apparently discussed this opportunity with Giancarlo Devasini, the CFO of both Bitfinex and Tether, and the two agreed to form a joint venture with Swan providing management and Tether providing financing.

Additionally, the lawsuit reveals that Tether, through BFX Ventures, had previously invested in Swan.

The next month, then chief investment officer for Swan, Raphael Zagury, apparently began managing the Australian mining operations. This was helped by a group of consultants and employees, many of whom now work for Proton. 

According to the lawsuit, near the end of July 2023, Tether subsidiary Zettahash entered into an agreement with Swan to create 2040 Energy. This entity was funded by Tether, and a poorly redacted portion of the lawsuit reveals that Tether also “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.

In February 2024, Tether and Swan began planning 2140 Energy to invest in a Tasmanian mining operation.

However, this agreement didn’t play out as imagined. Allegedly, the executives behind Swan’s bitcoin mining operation planned “rain and hellfire” by:

• downloading the ‘BNOC’ software
• creating a company
• having Tether provide “legal cover.”

In June 2024, Zach Lyons of Marlin Capital Partners, apparently a Tether advisor, allegedly communicated to Swan that Tether would be interested in investing in it.

However, days later, Zagury communicated to Swan that Tether was not interested in most of Swan; it was interested in mining and suggested spinning that off. 

Several days later, Zagury suggested Tether effectively force Klippstein to resign as CEO and accept ‘wind down capital’ in exchange for handing over the mining business.

Later in July, Zagury and Devasini apparently met and decided to add Zagury to the board of 2040 Energy and proposed moving 2040 Energy’s bitcoins to the custody of Zagury.

Also in July, Swan announced layoffs and the end of its Managed Mining Unit.

In early August 2024, several of these executives began to resign. An email was subsequently sent from Tether’s counsel that claimed, “I understand that most or all of the Swan Mining employees have resigned this morning. I have spoken with Tether and confirmed that these former employees were not encouraged to resign and have no existing arrangements with Tether.” 

Based on another poorly redacted part of the filing, Tether’s counsel sent a ‘Notice of Event of Default,’ to Swan’s counsel that claimed 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.

It claimed that 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.”

Days later Klippstein resigned as CEO of 2040 Energy, in part because “Tether had accused Swan (again, his company) of breaching the Shareholders Agreement.”

Tether also apparently sent a ‘Notice of Continuing and Additional Breach,’ alleging again that “Swan had further breached the 2040 Energy Shareholders Agreement based on the resignations of ‘a substantial number of Swan employees responsible for carrying out and overseeing the ongoing business operations of 2040 Energy.'”

Tether’s counsel added, “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.”

Since then Swan has scuttled plans for a Series C fundraising round and IPO.

The dashboard and optimizations

One of the specific pieces of intellectual property that Proton Management took is apparently the Bitcoin Network Operating Center,  a dashboard that allows the mining firm to track some metrics related to the mining operations.

This dashboard can also be used to help analyze the profitability of bitcoin mining.

Additionally, Swan was apparently doing its own “proprietary” “overclocking and underclocking” procedure to increase the efficiency of its bitcoin mining operation. 

Additionally, it supposedly took documents related to client relationships.

Read more: We asked Swan CEO about layoffs, withdrawal times, and the canceled IPO

In addition to having to delay its IPO, Swan has also had to lay off employees and restructure the company following the decision to end the mining business. 

Protos has reached out to Tether and Swan for additional context on this lawsuit and Tether has provided the following comment:

“Tether is aware of recent allegations made in a lawsuit that mentions a subsidiary of Tether dedicated to proprietary mining and other investments. While Tether is not a named defendant in the case, we have taken note of the claims and deny any implications of wrongdoing.

“Tether remains committed to enabling financial freedom, educational empowerment, energy sustainability, and data sovereignty. We believe our operations and conduct align with these values.

“As this is an ongoing legal matter, we will refrain from providing further comment at this time. We will continue to monitor the lawsuit and provide updates as appropriate.

“In the meantime, Tether’s business operations continue as usual.”

Update September 27, 11:47 UTC: Added a response from Tether.

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The post Swan Bitcoin lawsuit targets former executives, implicates Tether appeared first on Protos.

A few months ago, Swan Bitcoin was climbing the ranks among the world’s largest Bitcoin companies. It passed $220 million in annualized revenue, planned to IPO on the Nasdaq, was mining 1.7% of the entire Bitcoin network (11.3 exahashes per second), and scheduled its third annual conference along with an additional events business.

Not only that, on May 7, Swan confirmed rumors that had circulated since January that it had partnered with Tether for its Managed Mining business.

As of January 12, the company had taken in approximately $25 million of a $30 million convertible note leading into its Series C financing. As Wall Street knows, by the time a company gets past a C or D round, an IPO is likely around the corner.

However, a few days ago, Swan announced a massive round of layoffs, canceled its conference, and suspended its IPO plans. According to CEO Cory Klippsten, the IPO plan was shelved because Swan “didn’t carry forward with a big financing partner for our Managed Mining business.”

Protos asked the Swan CEO to explain the cancellation.

Swan CEO Cory Klippsten on IPO, downsizing

According to Klippsten, the IPO plan depended on revenue from Swan’s mining joint venture that Swan managed since inception. “The recent disagreement with a major capital partner meant that we no longer have a path to IPO in the near term and also no longer have the expectation of significant near-term cash flow from mining,” he told Protos.

Klippsten also denied that there were ulterior reasons for the cancellation, explaining that four of Swan’s major products have been performing well. “Financial services revenue was up 132% year-over-year in the first half of 2024, with significant growth across all four of our major products: Swan App, Swan Private, Swan IRA, and Swan Vault,” he said.

Although Swan increased marketing expenses and deliberately hired more employees in anticipation of filing for SEC approval of its IPO documents, “With the reason and the cash for aggressive spending gone, we had to cut both marketing and staff,” Klippsten concluded.

Read more: Some Swan Bitcoin customers lose banking access

Swan responds to withdrawal processing times

In the wake of the disappointing IPO and downsizing news, critics were quick to sound alarms about customers withdrawing their bitcoin. The history of crypto has endless examples of small financial problems cascading into major catastrophes from Vauld, Celius, Voyager, FTX, or countless others, so their concerns were understandable.

So far, Swan has processed withdrawal requests and aims to assure its customers that it is unlike those failures. Swan co-founder Yan Pritzker responded to the most vocal criticism directly, clarifying that although compliance has extended withdrawal times recently, Swan is honoring all valid withdrawal requests.

Bitcoin transaction fees

Other critics highlighted a potential mismatch between the self-custody practice that Swan encourages and Bitcoin’s expensive fees for on-chain withdrawals. Indeed, Swan is a vocal proponent of self-custody, encouraging customers to withdraw their purchases. However, it is expensive to deal with small amounts of bitcoin due to persistently high bids for block space.

Specifically, bids for a single bitcoin transaction are currently $0.56 and occasionally spike above $100. For distinct withdrawals of just a few dollars apiece, critics speculated that Bitcoin’s fees might be a persistent drain on Swan’s profitability.

Klippsten responded to this speculation in a comment to Protos. “Swan offers free automated withdrawals at certain thresholds that create reasonably sized UTXOs. Some clients like to withdraw based on time, not amount. For these clients, we provide an option to withdraw weekly. We tell clients that withdrawing their Bitcoin once it reaches a certain threshold reduces future fees and improves privacy. It has no effect on Swan’s finances as we batch withdrawals anyway.”

Read more: Swan Bitcoin questioned over unnamed investor and new trading fund

Comments on Pacific Bitcoin, Vault, and Force

Protos also asked Klippsten to explain the reasons for canceling what would have been its third annual Pacific Bitcoin conference. “We’re fully focused on Swan’s core business right now, and after going through a staff reduction last month, it just doesn’t feel like the right time for a festival,” he explained. “We’re doing a smaller one-day event for clients and partners during the conference’s planned dates, and we hope to bring Pacific Bitcoin back in 2025.”

Klippsten also confirmed to Protos that, despite the latest round of staff cuts, Swan Vault and Swan Force are still operational.

“We already built and launched Swan Vault [which] gives clients full control over their money without having to go it alone,” he said.

“Swan Vault has its roots in our acquisition of Specter Solutions and its team in 2022, which drove development of the open-source Specter Desktop project.”

Klippsten also reiterated that “Swan Force, our referral program, still exists.”

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The post We asked Swan CEO about layoffs, withdrawal times, and the canceled IPO appeared first on Protos.

Swan, a firm focused on offering Bitcoin financial products, is abandoning mining, shelving its planned initial public offering (IPO), and laying off employees, according to a post on X (formerly Twitter) by the firm’s CEO Cory Klippsten. 

Swan’s managed mining business targeted large institutional investors with the opportunity to partner with it and invest in mining facilities. The initial announcement of this product noted that Tether had “already dedicated substantial capital to establishing a major presence in bitcoin mining, much of it through Swan.”

In a statement to Protos, Tether said, “Tether’s hosted contracts with Swan’s mining entity are unaffected and we do not expect any interruptions. The team running such operations is segregated and will continue operating normally.”

Apparently, despite the partnership with Tether, the unit has failed to deliver on Swan’s “expectation of significant near-term revenue.” This apparently led to the decision to delay an apparently planned IPO.

The post also notes that Swan has had to perform a ‘staff reduction’ this week, though numbers were not provided. At least one employee in an education role, Stephen Livera, took to X to state that his position had been eliminated.

Read more: Swan Bitcoin’s custodian now owned by Ripple — but execs have major beef

Despite Swan seeming to have some issues, Klippsten still claims to believe “this is an incredible moment in time for Bitcoin.”

Klippsten had previously criticized Celsius, one of Swan’s competitors, claiming that “the Celsius ‘mining IPO’ was always just marketing puffery.” Now he tells his followers that he will “see you on the battlefield. #TeamBitcoin.” 

Protos has reached out to Swan to determine how ending the managed mining program will affect partners, and how many employees were laid off, and it directed us to Klippsten’s post on X.

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The post Swan abandons mining and IPO, lays off employees appeared first on Protos.

Swan Bitcoin recently announced numerous new lines of business, including bitcoin-backed lending, venture and private equity investments, and incredibly, a trading fund. Indeed, despite repeated warnings against active trading and an unwavering buy-and-hold message regarding bitcoin, Swan has hired a quant trader to actively trade the currency.

Fortune Crypto wrote that Swan “deployed” $200 million worth of capital in 2023. In that piece, Fortune publicized Swan’s “$40 million in funding raised in 2023 for expansion efforts.” However, it was initially difficult to determine exactly how much equity Swan sold to raise that capital.

In an email to Protos, Klippsten further explained, “$16.5 million was in our Series B round, which priced in November 2022 and closed in early 2023. We’ve taken about $25 million so far on a $30 million convertible note leading into our Series C.”

Swan disclosed $50 million allocated to its new trading fund, Timechain Alpha, whose raise has closed. Swan’s Institutional webpage doesn’t name the source or denomination of those funds.

Klippsten promised more details on the terms and participants of that round within a few months, however, since then, Swan has repeatedly declined to name the primary source of its 2023 fundraising efforts.

On an episode of Laura Shin’s Unchained podcast, Klippsten further explained Timechain Alpha. Its newly-hired trader, who previously worked at Cumberland and Tower Research, now trades for Swan using “all code and signals and uses AI and market micro-structures to determine whether he has enough time window to get in and out of his positions and all this kind of stuff, so he’s very sophisticated.”

Read more: Swan Bitcoin’s custodian now owned by Ripple — but execs have major beef

Matt Odell guesses the name of Swan’s biggest investor

One of the earliest organizers of Bitcoin Magazine’s annual conferences, Matt Odell, is a managing partner at bitcoin-focused investment fund, Ten31.

Swan says it deployed $150 million in 2023 yet, according to Odell, “nobody knows anywhere where that money went.”

Of course, Odell does not admit that Swan could have deployed that capital on new lines of business or other places outside the visibility of Ten31’s deal flow monitoring. He does, however, contrast this alleged opacity with Ten31, which deployed approximately $100 million into 36 companies from 2021 through 2023 and publicly disclosed its investments.

Odell suspects Swan’s revenue numbers are exaggerated, although he doesn’t consider business operations that aren’t publicly advertised. Indeed, it’s highly unlikely that Swan’s 0.99% commission on bitcoin purchases alone would account for its $125 million in annualized revenue.

In a moment of pure speculation with co-host Marty Bent, Odell supposed that money connected to Tether might be supporting Swan. Odell guessed, “The only thing that could kind of even come close to making sense is if it’s Bitfinex/Tether money.” Odell admitted that he didn’t have evidence of Tether’s involvement.

Klippsten responds to Odell

Klippsten disputes these claims and believes that Odell holds inaccurate beliefs about Swan. The Swan CEO notes that Odell was an early advisor yet does not have privileged information rights nowadays.

In an email to Protos, Klippsten explained, “We have hundreds of investors historically, and a planned $150M Series C raise underway. We are extremely selective about disclosing our capital partnerships, whether for Swan directly or for our financing of deals through Swan Institutional, because whenever capital providers become public knowledge they get inundated with funding inquiries from companies and venture funds.”

He also responded to Odell’s criticism of Timechain Alpha. “We needed a head of trading for institutional clients to execute trades… from multiple OTC desks. He happened to have a great track record of asset management, and a strong desire to continue managing money… The fund is already at capacity and we are not marketing it.” Swan’s December 7, 2023 press release claims that Timechain Alpha launched fully subscribed.

Withdrawal requests honored

Swan’s first custodian of record, Prime Trust, collapsed into bankruptcy in August 2023. The founder of that company, Scott Purcell, resigned from Prime Trust and started a similar company, Fortress Trust.

Read more: Former Binance US custodian Prime Trust joins crypto’s chapter 11 club

Despite these custodians’ troubles, Swan has fulfilled customer withdrawal requests. Indeed, the vast majority of customers have already withdrawn their bitcoin into self-custody. 

Klippsten told Protos, “Every single withdrawal request has been processed unless it was involved in suspected fraud or a criminal case. Swan has never lost a cent, and never lost a sat.”

He added, “Our goal is zero BTC under custody for non-regulated segments and we’re proud that 83% of all bitcoin purchased through Swan historically has been withdrawn. We don’t charge for custody because we don’t want to create the incentive to accumulate custodied coins, and we have free withdrawals for our users for the same reason.”

Of the bitcoin that Swan reluctantly custodies — again, despite an 83% withdrawal rate and repeated calls for customers to withdraw into self-custody — the company currently stores most at insured, multi-signature, cold storage wallets in BitGo’s custody.

Swan also says it holds a few coins in hot wallets or Fireblocks wallets controlled by Fortress and Bakkt to satisfy regular, day-to-day customer purchases and withdrawals.

Other Swan criticisms and responses

Protos has previously covered Ripple’s eyebrow-raising bid to acquire Swan’s primary custodian of record, Fortress Trust — surprising given how often Klippsten had accused Ripple executives of criminal activity. Ripple’s deal to acquire Fortress Trust ultimately fell through.

The previous year, Klippsten publicly discussed the use of mortgages in wealth planning for Bitcoin investment. Naturally, Bitcoiners quickly attacked what appeared to be an endorsement of leverage.

Klippsten clarified to Protos, “We announced a year ago that we were working on a Swan Home Equity product and we continue to look for the right path to bring it to market. People already use HELOCs to diversify their holdings into bitcoin.

“We’re hoping to let people accomplish that with a single transaction, with extremely conservative LTV limits, and no out-of-pocket costs on origination. It’s not controversial at all with anyone who has actually taken a few minutes to understand the product, and there is a ton of demand for it.”

Not only this, Swan drew considerable criticism for advising users not to withdraw directly into mixing services. Samourai Wallet described that move as “preemptively” complying with sanctions while Bitcoin Takeover podcast host Vlad Costea described the move as “dystopian.” In response, Swan CTO Yan Pritzker defended his company’s position on mixing services in a lengthy tweet.

Swan has also consistently criticized misbehavior in the crypto industry, including FTX, Celsius, Voyager, BlockFi, Terra LUNA, and many other failed projects. Its media division and all of its company spokespeople consistently focus on Bitcoin and disavow altcoins entirely.

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Edit 21:30 UTC, Jan 12: Corrected the amount of Swan’s Series C convertible note. Corrected references to Timechain Alpha’s location. Corrected Matt Odell’s role as an early advisor, not investor, in Swan.

The post Swan Bitcoin questioned over unnamed investor and new trading fund appeared first on Protos.

Swan Bitcoin is warning users to not withdraw directly to Wasabi or Samourai wallets, two of the most popular bitcoin mixing services. For at least the third time, Swan customers are having problems with banking access.

Specifically, Swan Bitcoin co-founder Yan Pritzker recently admitted that “some of the banks and qualified custodians that Swan works with have been freezing or terminating accounts.” An email from Swan claims that these suspensions affect customers who deposit or withdraw bitcoin with a bitcoin mixing service.

Pritzker’s fellow co-founder and CEO Cory Klippsten says Swan is negotiating with banks and considering legal actions.

Swan Bitcoin has more problems with banks

Critics were quick to publicize the announcement. Many claimed Swan was kowtowing to banks. A customer said, “Swan financially only supports chain surveillance and policies in direct conflict with Bitcoin.’

Samourai Wallet had particularly sharp words. “It’s still a proposal you lame f*cking p*ssies,” the firm posted on X. “Instead of mounting a defense you preemptively comply? Absolute losers.”

Paul Sztorc bemoaned Swan’s announcement, saying Bitcoin’s ability to enable permissionless transactions — to any entity, including anonymizers — is Bitcoin’s primary value proposition. Many chuckled, claiming that Swan was walking an inexorable path toward reinventing PayPal.

Pritzker added more context to the Swan’s latest round of banking troubles. He clarified that Swan doesn’t have an explicit policy forbidding the use of mixing services. To the contrary, the company published a guide to using them.

However, a screenshot of Swan Bitcoin’s update on anonymizing wallets says otherwise. In boldface, it reminds customers that they shouldn’t deposit and withdraw directly with anonymizers, implying that adding a few hops might obfuscate their intentions to banking partners.

It’s unclear how effective or lasting this tactic would be for customers. Even if banks and payment processors targeted customers with direct transactions with anonymizers in their latest round of suspensions, tracing activities a few additional hops might be a trivial addition during their next round of suspensions.

Yan Pritzker continues anti-FinCEN rant

Pritzker says banks and qualified custodians have been terminating services to various companies — not just Swan — that interact with crypto mixing services. He sympathizes with customers, admitting that these financial institutions are often the only way to have a viable on-ramp and off-ramp for bitcoin activities.

Indeed, many financial institutions have demonstrated reluctance to support customers to directly send funds to mixers, tumblers, coinjoin pools, or any other type of identity-obscuring service. Pritzker blamed the US political climate and stringent regulations for financial businesses that don’t implement strict know your customer (KYC), anti-money laundering (AML), and Countering the Financing of Terrorism (CFT) procedures.

Pritzker ranted, saying politicians vastly overstate how much bitcoin is used to fund criminal activities like terrorism. He promised to fight for privacy rights in courts and express political dissent to entities like the Financial Crimes Enforcement Network. He recommended an alternative to Wasabi and Samourai, Bisq.

Pritzker blamed surveillance overreach of the Patriot Act and its predecessor, the Bank Secrecy Act, which require banks to collect and report on suspicious activities. He blames banks’ filing of frivolous suspicious activity reports (SARs) that make it easy for the government to surveil innocent people’s financial lives.

Read more: Bitcoin’s CoinJoin services threatened by new FinCEN rules

Banking problems persist at Swan Bitcoin

In the end, the news is simply another banking problem at Swan Bitcoin. For whatever reason, the company seems to have a fiat on-/off-ramp crisis every few months. Swan’s first custodian of record went bankrupt. The acquirer of Swan’s second custodian of record bailed on that acquisition after it lost millions of dollars worth of assets, and its CEO resigned.

It claims that custodying bitcoin through third parties is so problematic that it is building its own custodial solution alongside BitGo. It will debut that self-branded service sometime in 2024.

Read more: Prime Trust halts withdrawals and deposits as acquisition fails

In summary, banks and qualified custodians have suspended services to some customers of Swan Bitcoin. The freezes and account terminations have targeted Swan customers who interacted with coin mixing services like Samourai and Wasabi.

Swan is now recommending that customers who want to use these services add hops to their transaction trail, but the effectiveness of this strategy seems temporary.

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Edit 17:55 UTC, Nov 15: Corrected headline to clarify that only some Swan customers have been affected.

The post Some Swan Bitcoin customers lose banking access appeared first on Protos.

Since 2022, Swan Bitcoin CEO Cory Klippsten has been alleging criminal conduct by Ripple executives. Last week, Ripple announced its acquisition of Swan Bitcoin’s major custodian, Fortress Trust.

Whoops.

A few months ago, Swan Bitcoin transitioned from Prime Trust to Fortress Trust and BitGo. Prime Trust is in bankruptcy proceedings. Fortress Trust also allegedly lost funds from its hot wallets in another security incident. Ripple is allegedly making harmed Fortress customers whole as part of its acquisition.

Swan Bitcoin claims that although Fortress lost funds in a security incident, that incident did not involve Swan Bitcoin’s customers. It claims, “Swan client coins are in insured cold wallets at BitGo and did not move during the reported incident at Fortress. The coins are protected by video calls and physical access, and are not subject to any incidents at Fortress.”

Moreover, Klippsten claims that Lloyd’s of London underwrote insurance of up to $250 million per bitcoin wallet for some of Swan Bitcoin’s customers, with no wallet holding more than $250 million.

In any case, Ripple is acquiring Fortress Trust. Suddenly, Klippsten has new, wealthier, and more powerful higher-ups — that he has repeatedly claimed are criminals.

Klippsten claimed his suitors committed financial crimes

• On March 29, 2022, Klippsten alleged, “Chris Larsen from Ripple is a scam artist. He lies about Bitcoin, professionally, to enrich himself.”
• That same day, Klippsten wrote, “Chris Larsen is one of the worst actors in the entire crypto space, who’s made a living from lies, misinformation, and securities fraud.”
• On November 8, 2022, Klippsten concluded, “Ripple is a scam.”
• On December 7, 2022, Klippsten tweeted, “Here’s hoping Larsen shares a cell with SBF.”
• On December 18, 2022, Klippsten called Larsen a “criminal scam artist.”
• On March 24 of this year, Klippsten alleged that Chris Larsen has “been pumping and dumping XRP unregistered securities on unsuspecting retail for the last decade.”
• On March 25, 2023, Klippsten alleged that “Chris Larsen and the other owners of Ripple/XRP” were perpetrating “a criminal game of securities fraud.”

In an ultimate twist of irony, Ripple announced it was acquiring the primary custodian of Klippsten’s Swan Bitcoin, Fortress Trust, on September 8, 2023.

Swan CEO made repeated claims of Ripple’s criminal conduct

Swan Bitcoin CEO Cory Klippsten has a history of criticizing Ripple, often to the annoyance of the “XRP Army.” In addition to claims about civil misconduct, he also made claims about criminal acts.

Klippsten has claimed Larsen, a billionaire co-founder of Ripple, has acted as a “criminal scam artist,” made a living from professional lies, committed securities fraud, and pump-and-dumped unregistered securities onto retail victims.

He noted that Larsen contributed up to $5 million for Greenpeace’s anti-Bitcoin mining ad campaign against Bitcoin. Klippsten also retweeted a post by Coin Center’s Neeraj Agrawal, who accused Larsen of preferring “a world where CEOs can centrally control the future of a cryptocurrency network.”

Klippsten has called Chris Larsen “anti-human.” He repeated that sentiment by calling Greenpeace “anti-Bitcoin, anti-freedom, anti-human” over its opposition to Bitcoin, emphasizing that Larsen was funding its anti-Bitcoin advertisements.

Although the Securities and Exchange Commission (SEC) has not filed (and as a civil enforcement agency, never will file) a criminal lawsuit against Ripple, commissioners’ civil lawsuit against Ripple is well into its second year. Commissioners alleged that Ripple, including Larsen, raised $1.3 billion in unregistered securities sales. Commissioners are also appealing a court ruling that handed Ripple a partial victory.

Read more: SEC wants 2nd Circuit to overrule Ripple XRP decision

Klippsten can be snarky at times. He teased XRP holders by suggesting selling XRP to buy bitcoin on Swan Bitcoin. And finally, in case Klippsten wasn’t perfectly clear, he believes the current suitor of his company’s primary custodian is an outright scam.

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