Swan Bitcoin has filed a lawsuit against some of the former employees of its mining venture for allegedly stealing proprietary software and trade secrets to launch a competing firm, Proton Management.
In a Sept. 25 lawsuit filed with a Los Angeles federal court, Swan alleged that six of its former staffers conspired to âharm Swanâs ability to compete in the marketâ by stealing what the filing dubbed as âcrown jewelsâ from its mining business.
Founded in 2019, Swan Bitcoin offers financial services for investors and branched out to the mining sector after launching Swan Mining in 2023. The complaint alleges that the defendants executed a pre-planned scheme called ârain and hellfireâ to take over Swanâs mining business from the inside.
According to Swan, the former employees stole proprietary code for its mining monitoring software and thousands of confidential documents before resigning between Aug. 8 and Aug. 9.
Further, the defendants have been accused of soliciting key personnel and securing Swanâs business partners, including stablecoin issuer Tether. The firm behind USDT was specifically intended to provide âlegal coverâ for the misdeeds of the âcopycat company,â the complaint added.
Tether, a key funding partner, replaced Swan with Proton in their mining agreement on Aug. 12, just days after the defendants resigned.
The duo had also launched a managed mining service for institutional investors, aiming to increase its capacity to 100 exahashes by 2026. The recent lawsuit could impact the future of these plans.
The complaint further reveals that Swan struggled with revenue issues in its mining division. Swanâs CEO Cory Klippsten told the community in July that the company might shut down its managed mining service. Around the same time, Swan reportedly considered selling its mining business to Tether.