Bitcoin financial services firm Swan Bitcoin has filed a lawsuit against several former employees from its mining arm, alleging they stole the firm’s software code, resigned and then used that code to kickstart their own mining business.
Conflict Background
According to Swan Bitcoin's attorneys, the former staff allegedly founded the competitor firm Proton Management and convinced one of Swan’s funding partners, stablecoin issuer Tether, to cut ties with Swan and work with them instead.
Actions of Former Employees
In the court filing from September 25, it is claimed that the actions were intended to 'irreparably harm Swan’s ability to compete in the market. They 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. Swan’s former Head of Business Development, Michael Holmes, is named as Proton’s 'ringleader,' while former Chief Investment Officer and Mining Head Raphael Zagury serves as Proton’s CEO.
Swan Bitcoin's Legal Measures
The filing also suggests that Swan was 'blindsided' by a spree of resignation letters on August 8 and 9, followed by Tether notifying Swan on August 12 that the firm would be replaced by Proton in the mining agreement. Swan is seeking a permanent injunction against Proton to prevent it from further disrupting Swan’s mining business. The company is also asking the court to compel its former employees to return stolen equipment and 'confidential material.'
Swan is also requesting a jury trial and for damages to be determined at trial.
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