Swan Bitcoin has filed a lawsuit towards among the former employees of its mining enterprise for allegedly stealing proprietary software program and trade secrets to launch a competing firm, Proton Administration.
In a Sept. 25 lawsuit filed with a Los Angeles federal courtroom, Swan alleged that six of its former staffers conspired to “hurt Swan’s capacity to compete out there” by stealing what the submitting dubbed as “crown jewels” from its mining enterprise.
Based in 2019, Swan Bitcoin affords monetary providers for buyers and branched out to the mining sector after launching Swan Mining in 2023. The criticism alleges that the defendants executed a pre-planned scheme known as “rain and hellfire” to take over Swan’s mining enterprise from the within.
In accordance to Swan, the former employees stole proprietary code for its mining monitoring software program and hundreds of confidential paperwork earlier than resigning between Aug. 8 and Aug. 9.
Additional, the defendants have been accused of soliciting key personnel and securing Swan’s enterprise companions, together with stablecoin issuer Tether. The firm behind USDT was particularly supposed to present “authorized cowl” for the misdeeds of the “copycat firm,” the criticism added.
Tether, a key funding accomplice, changed Swan with Proton of their mining settlement on Aug. 12, simply days after the defendants resigned.
The duo had additionally launched a managed mining service for institutional buyers, aiming to improve its capability to 100 exahashes by 2026. The latest lawsuit might impression the way forward for these plans.
The criticism additional reveals that Swan struggled with income points in its mining division. Swan’s CEO Cory Klippsten told the community in July that the corporate may shut down its managed mining service. Across the identical time, Swan reportedly thought of promoting its mining enterprise to Tether.
Swan argues the stolen info helped Proton achieve an unfair benefit within the competitive Bitcoin mining market.
The firm claims to possess proof of the theft and subsequent cover-up makes an attempt. It’s submitting the lawsuit to defend its rights, accusing the defendants of trade secret misappropriation, breach of contract, and aiding and abetting a breach of obligation of loyalty.
Swan has requested a jury trial to decide the damages and requested the courtroom to push for the return of stolen gear and the confidential materials in query whereas additionally in search of a everlasting injunction.
Core enterprise unaffected
Regardless of the authorized tussle, Klippsten has assured the group that the monetary providers firm has had a worthwhile yr, with a 132% year-on-year income improve, clarifying that the latest information doesn’t have an effect on the core enterprise for the reason that mining arm is “separate and segregated.”
Swan’s income hike got here on the again of latest product rollouts, together with the launch of the Bitcoin Particular person Retirement Accounts in partnership with U.S.-based self-directed IRA supplier Fairness Belief Firm. The providing permits Swan prospects to handle Bitcoin inside tax-advantaged retirement accounts.