- Swan Bitcoin filed a lawsuit against ex-employees for allegedly stealing their software codes and data.
- This plan was executed by ex-employees allegedly at the direction of Tether.
- Mining operations are not affected by this incident.
Bitcoin company Swan is suing its ex-employees for allegedly stealing the software code and confidential data. Swan Bitcoin has claimed that six former employees have stolen its trade secrets to create a similar firm named Proton Management. Swan has accused Tether of being part of the ‘rain and hellfire plan.’
The former employees allegedly carried out this corporate espionage to steal its Bitcoin mining business at Tether’s Direction. Recently, Swan CEO Cory Klippsten has issued a statement on social media regarding the unaffected mining operations.
Lawsuit Filed by Swan Bitcoin
Swan Bitcoin has filed a lawsuit against its former employees and Proton Management in the US District Court for the Central District Of California. According to the complaint, these employees used the stolen assets to form a competing entity named Proton Management.
The six employees are accused of stealing highly proprietary code, hash-rate optimization techniques, and financial models. Then, the lawsuit further claims that the ex-employees colluded with Tether to undermine Swan Bitcoin’s mining operations.
Also, they are allegedly responsible for stealing their vendors and business partners. These former employees are accused of breach of contract, misappropriation of trade secrets, and unfair competition.
Swan Bitcoin was founded in 2019 to provide investors with financial services. Then, they launched their Bitcoin Mining operations in 2023. The stablecoin giant Tether funded Swan’s bitcoin mining operation the previous year.
The lawsuit claims that Tether was double-dealing with Swan Bitcoin. Swan has accused Tether advisor Zach Lyons of having secret meetings with the former head of mining, Raphael Zagary, and other ex-employees. After this incident, Swan Bitcoin ended its managed mining unit and canceled its first public offering (IPO).
Soon, the defendants resigned from Swan and started Proton Management company. On August 12, Tether replaced Swan with Proton in their mining contract. Also, a deal for a managed mining service for institutional investors was made between both parties.
Swan Bitcoin Seeks Financial Compensation
Swan has asserted that this misconduct has inflicted irreversible damage to its operations. It potentially leads to the loss of business opportunities and a tarnished reputation. The lawsuit cites a calculated strategy where the former employees, alongside Tether, aimed to dismantle Swan’s mining business from the inside out.
Now, Swan Bitcoin seeks permanent injunctions against the defendants. Also, they have asked for restitution and punitive damages against Proton Management. Swan wants the items that were taken without authorization. The verdict in this legal battle can set a standard for resolving IP conflicts in the cryptocurrency sector.
Cory Klippsten: Mining Operations Unaffected
Recently, Swan’s CEO Cory Klippsten stated on X (formerly Twitter) that the mining operations have always been conducted in a “separate and segregated” manner. Klippsten added that mining operations were unaffected by the news of the alleged theft of software codes.
+132% YoY 🚀 @Swan financial services revenue is up big.
— Cory Klippsten 🦢 Swan.com (@coryklippsten) September 27, 2024
Been an awesome last 12 months of product launches (Swan IRA, Swan Vault), excited for more geo and product launches soon 😎
Mining has always been separate and segregated. Recent news does not affect our core business.
Disclaimer
The information in this article is for educational purposes. It does not constitute financial advice. Readers should conduct their own research before investing in cryptocurrencies. The author is not liable for any actions taken based on the information provided in this article.
