Lawsuit Filed Against Ex-Staff by Swan Bitcoin
Swan Bitcoin, a prominent Bitcoin financial services firm, has filed a lawsuit against several former employees from its mining division, accusing them of stealing proprietary software and launching a competing business.
BREAKING: TROUBLED BITCOIN EXCHANGE âSWANâ FILES LAWSUIT AGAINST ITS ENTIRE TEAM OF FORMER EXECUTIVES
ACCORDING TO LAWSUIT, SWAN IS âIRREPARABLY HARMEDâ AND SUFFERED âENORMOUS ECONOMIC DAMAGESâ
đšđšWITHDRAW ALL YOUR FUNDS FROM SWAN IMMEDIATELYđšđš pic.twitter.com/iZsAbFGJB7
â Udi | BIP-420 đ± (@udiWertheimer) September 26, 2024
The lawsuit, filed in the US District Court for the Central District of California, claims the ex-employees took highly confidential code from Swan's Bitcoin mining monitoring software and, after resigning en masse, used it to form a rival company, Proton Management.
The filing stated:
âThey hatched a plan to steal Swan's mining business from the inside, usurp Swan's role, and cut Swan out from the Tether joint venture. They dubbed it 'rain and hellfire.'"
It added:
âThe evidence of Defendants' brazen theft is overwhelming. [The former employees] were stealing the crown jewels from Swan's Bitcoin mining business.â
The complaint also alleges that these individuals, led by Swanâs former Head of Business Development Michael Holmes and former Chief Investment Officer Raphael Zagury, conspired to poach Swan's vendors and business partners, including Tether, a key funding partner.
According to this lawsuit @alphaazeta basically decided to steal Swan's mining division and jump ship to Tether, causing one of the biggest layoffs in the industry đ± https://t.co/HZysEcxEAF pic.twitter.com/Hoi0rY5Lso
â Coinjoined Chris ⥠(@coinjoined) September 27, 2024
According to the filing, Tether withdrew its support from Swan and entered into a new agreement with Proton shortly after the mass resignations.
+132% YoY đ @Swan financial services revenue is up big.
Been an awesome last 12 months of product launches (Swan IRA, Swan Vault), excited for more geo and product launches soon đ
Mining has always been separate and segregated. Recent news does not affect our core business.
â Cory Klippsten 𩱠Swan.com (@coryklippsten) September 27, 2024
Swan asserts that this coordinated effort was designed to "irreparably harm" its ability to compete in the Bitcoin mining sector, accusing the former employees of executing a calculated plan to steal trade secrets and undermine the company's business operations.
Was Tether in the Know or in the Dark?
In May 2024, Swan Bitcoin launched a managed Bitcoin mining service for institutional investors in partnership with Tether, aiming to reach 100 exahashes of computing power by 2026.
Swan Announces Managed Bitcoin Mining Service
Swan Bitcoin launches Managed Mining service for institutional investors, announces strategic collaboration with Tether, targets 100 EH by 2026.
Swan Bitcoin, a leader in Bitcoin mining innovation, is proud to announce the launch of⊠pic.twitter.com/hS9P5Rvi01
â Swan (@Swan) May 7, 2024
However, by July, Swan's CEO Cory Klippsten signaled that the managed mining business might shut down, citing challenges in generating sustainable revenue.
According to the recent court filing, Swan had been considering selling its entire Bitcoin mining division to Tether around that time.
The company is now investigating the alleged actions of former executives and employees, who are accused of misappropriating proprietary data and trade secrets before their abrupt resignations.
Swan is seeking a permanent injunction against Proton Management to prevent further disruption of its mining business and is requesting the return of stolen equipment and confidential materials.
The firm is also pushing for a jury trial to seek damages to be determined during the proceedings.
