Swan Bitcoin recently made headlines after taking legal action against former employees and a competitor, Proton Management, in what seems to be a contentious battle over Bitcoin mining operations.
The lawsuit, filed in the US District Court for the Central District of California, accuses ex-employees of engaging in corporate espionage by allegedly stealing crucial software code and customer data from Swan Bitcoin. These former employees then allegedly used this information to launch a competing company, Proton Management.
Cory Klippsten, CEO of Swan Bitcoin, emphasized that the ongoing legal dispute does not affect the company's core business, as their mining operations remain separate and unaffected.
Ex-CIO and Business Head Accused of Orchestrating Takeover
The lawsuit identifies Michael Holmes, once Swan's Business Development Head, as the mastermind behind Proton Management. It also points out that Raphael Zagury, the former CIO and mining chief at Swan, now leads Proton as its CEO.
Proton employees are alleged to have poached staff from Swan's mining team and redirected financial support from Tether, a major backer. The scheme reportedly included Tether issuing a default notice to Swan, paving the way for a hostile takeover.
Swan Bitcoin faced unexpected resignations from key staff on August 8 and 9, with another blow following on August 12 when Tether informed them of the transition to Proton.
While Tether is not formally named in the lawsuit, it acknowledged the accusations but denied any misconduct, citing the ongoing legal nature of the matter.
Swan's Call for Redress and Industry Implications
Swan Bitcoin asserts that the alleged misconduct poses an immediate threat to its operations and reputation, prompting them to seek a permanent injunction against Proton and the return of misappropriated assets. The outcome of this legal battle may set a precedent for handling intellectual property disputes within the crypto industry.
In a related development, Swan Bitcoin had launched a managed mining service for institutional investors in partnership with Tether earlier in 2024. However, CEO Cory Klippsten hinted at the challenges faced by the mining operation, leading to workforce reductions and the decision to abort plans for an IPO.
