Originally published on: September 27, 2024
In a surprising turn of events, financial services firm Swan Bitcoin has taken legal action against ex-staff members from its mining division, accusing them of orchestrating a scheme to pilfer the company’s software code. The lawsuit claims that after absconding with the proprietary code, the former employees launched their own mining enterprise called Proton Management, presenting themselves as a direct competitor to Swan Bitcoin.
The Allegations Unveiled
According to the filed court documents on Sept. 25, Swan Bitcoin’s legal representatives argued that the ex-staff members’ actions were deliberate in their attempt to inflict irreparable damage on Swan’s standing in the market. The court filing specifically mentioned the group’s involvement in purloining confidential business information and trade secrets crucial for operating a Bitcoin mining business. Swan accused Michael Holmes, the former Head of Business Development, of leading the charge at Proton, with Raphael Zagury, Swan’s previous chief investment officer and mining head, assuming the role of Proton’s CEO.
The Hostile Takeover Plan
Referred to as the “rain and hellfire” plan, the strategy included a series of resignations on Aug. 8 and 9, culminating in Tether, one of Swan Bitcoin’s funding partners, severing its ties with Swan in favor of collaborating with Proton. Tether’s involvement was allegedly intended to provide a legal shield for the aggressive takeover, casting Swan into disarray. Notably, Swan had originally partnered with Tether in May 2024 to launch a managed mining service for institutional investors, with ambitious plans to scale up to 100 exahashes of computing power by 2026.
Legal Battle and Next Steps
Swan Bitcoin is now seeking a permanent injunction against Proton to safeguard its mining operations from further disruption. Additionally, the company aims to reclaim stolen equipment and confidential materials from the rogue employees. The lawsuit demands a jury trial to determine the extent of damages incurred by Swan due to the orchestrated scheme.
Stay tuned as this legal battle unfolds, shaping the landscape of the Bitcoin mining industry. For any comments or inquiries, Cointelegraph reached out to Proton but has yet to receive a response. Tether, on the other hand, responded to Cointelegraph’s request with a statement to be disclosed in due course.
Experience the latest in Asian crypto news with Asia Express, covering stories from the Chinese Tether laundromat to Bhutan’s rising Bitcoin momentum.
