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and, there's been an answer!
Our code is open source and your seed can restore your wallet with other wallet providers. Your funds will always be safe as they are in custody with you, and not us.
And it appears here is the question on that r/LiquidNetwork post:
Q.) How could the a government sensor SideSwap?
A.) Our code is open source and your seed can restore your wallet with any other wallet provider. Your funds will always be safe if you keep your seed. We're non-custodial.
In terms of SideSwap as a business, we do our utmost to not run afoul of any laws. Our accounts are in order, all filings are done on time, and the services we offer are not prohibited. Should a hypothetical government claiming global jurisdiction come after us with a different view, well, SideSwap may cease to be a going concern.