At the close of January 2024, Swan Bitcoin announced its bold move into the bitcoin (BTC) mining arena, reportedly boasting 4.5 exahash per second (EH/s) of hashpower already in action. Alongside this news, the company shared its ambitions to go public through an initial public offering (IPO). Fast forward to late July, reports surfaced that Swan had cut staff and hit the brakes on its IPO plans.
“Swan is unlikely to continue with our Managed Mining business in the near term,” Swan CEO Cory Klippsten stated on X on July 22. “Without the expectation of significant near-term revenue from our Managed Mining unit, we are pulling our plans to IPO in the near future.” In the recently filed lawsuit called “Electric Solidus, Inc. v. Proton Management Ltd,” Swan says ex-employees and a former executive attempted to steal the firm’s mining operation plans.
“The individual defendants (all former Swan consultants) conspired to steal Swan’s highly proprietary and confidential bitcoin mining business, technology, trade secrets, property and personnel,” the lawsuit alleges. The filing adds:
[Defendants] then resigned near-simultaneously on the evening of August 8, 2024, to join defendant Proton—a copycat company defendant Holmes created for the sole purpose of using Swan’s stolen technology and trade secret techniques and methods to usurp its mining business.
Alongside Proton Management, Tether, the world’s largest stablecoin issuer, is also accused of being involved in the alleged scheme. According to the lawsuit, former employees had secret meetings with Tether, and shortly after, the entire team resigned. Tether is facing accusations of supporting Proton once the employees parted ways with Swan including “legal cover.” Proton’s alleged conspired plan would “irreparably harm Swan’s ability to compete in the market,” the court filing notes.
The lawsuit states:
Tether, Swan’s funding partner in its mining operation, notified Swan that defendant Proton would be taking over ‘day-to-day’ bitcoin mining management in their joint venture.
Swan is seeking a permanent injunction against Proton, along with the return of its confidential materials. Neither Proton, a company incorporated in the British Virgin Islands, nor Tether has responded to the allegations. The lawsuit claims that among the assets allegedly taken were the “crowned jewels” of Swan’s mining business.
