Swan Bitcoin sues law firm for picking up Tether as client

Gibson, Dunn & Crutcher was caught up in a court fight with its client, Swan Bitcoin After the law firm hired a legal representative from a crypto rival, Tether on November 25. Swan claimed that the law firm was engaging in legal malpractice.

Swan Bitcoin, a BTC financial services company, has initiated legal action against the law firm Gibson, Dunn & Crutcher, which has been providing its services. This follows the firm’s decision to engage a legal representative who previously represented Tether, a stablecoin issuer, and its competitor. 

Swan Bitcoin sued and opened a new tab, Gibson Dunn, for legal malpractice on Friday in Los Angeles Superior Court. According to the lawsuit against former Swan employees, the entity claims that they started their own company with Tether’s financial support. The corporation was allegedly trying to dismiss Swan as a client in a federal trade secrets lawsuit

Swan Bitcoin against  Gibson Dunn – Why?

Reports say that Gibson Dunn was in the process of hiring a trial lawyer, Barry Berke. Berke is “one of Tether’s regular outside litigation attorneys,” Swan stated. According to federal court records, Berke was involved in at least one lawsuit on behalf of Tether.

Swan Bitcoin said one of its Gibson Dunn lawyers contacted its CEO days before the firm’s October announcement of Berke’s hire. Therefore,  Swan was advised by the attorney to look for new counsel. He argued that it was planning to engage an attorney whose present clients conflicted with Swan.

In addition, Swan claimed that Gibson is in clear violation of attorney ethics, which states that lawyers can’t drop a client by withdrawing from a case to avoid a conflict of interest. 

Swan communicated to Gibson Dunn in a letter. They made their intention to oppose the firm’s withdrawal from the lawsuit known. They also insisted that it either cut off ties with Tether as a client or disassociate itself from Mr. Berke and other laterals representing Tether altogether.

Therefore, on Monday, Swan submitted a request to the judge in the state court malpractice case. He additionally asked for a temporary restraining order. This opens a new tab that would prevent Gibson Dunn from eliminating it as a client.

Dave Wollmuth, a lawyer for Swan, said, “As stated in our complaint, we believe Swan’s treatment here has been highly inappropriate,”

Gibson Dunn claims on the malpractice case

Gibson Dunn officially asked in a Sunday court filing to be removed from the trade secrets case claiming the legal malpractice case. They said that Swan refused to pay its legal bills. The company referred to its relationship with Swan as “a complete breakdown.” 

According to the document, Swan had insisted on $18 million not to fight Gibson Dunn’s withdrawal request. The company informed Los Angeles U.S. District Judge Michelle Williams Court that “Gibson Dunn cannot continue to represent Swan under these conditions.”

The beef between Swan and Tether

The war has not begun today. Swan is a Bitcoin-focused financial services company. Tether is a dollar-pegged crypto that has experienced significant growth in recent years.

In September, Swan filed a lawsuit against several of its former workers, accusing them of stealing software code to establish a crypto-mining company called Proton Management. The company is backed by Tether. Gibson served as the company’s legal counsel during this court proceeding.

They claimed that they misappropriated thousands of papers containing Swan’s intellectual information and attempted to force Swan out of the joint venture with Tether. The action does not mention Tether as a defendant.

In addition, Swan claimed that Proton had persuaded Tether to abandon Swan and support Proton instead, allegations that Proton denied.

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