BTC fin-serv firm Swan Bitcoin has sued its former employees associated with its mining arm.
The firm contends that they stole the its software code. Right after, they left the company and used the code and confidential proprietary business information to launch their own mining operations under the label Proton Management.
They also went to the extent of cutting off Tether, one of Swan’s funding partners from the firm, and getting them onboard at Proton instead.
Michael Holmes, Swan’s former Head of BD is Proton’s “ringleader." Meanwhile, Raphael Zagury, the firm's former CIO and Mining head assumes the CEO position at Proton.
According to the lawsuit, he allegedly sowed "dissent and chaos” at Swan that triggered employees to leave the firm.
On August 8 and 9, Swan received resignation letters. Right on the heels, Tether notified Swan that it would be replaced by Proton in the mining funding agreement.
Meanwhile, Brett Hiley, Swan's former Vice President of Institutional Operations and Research, allegedly downloaded more than 300 confidential documents from Swan’s Google Drive.
That included details regarding its mining inventory, performance data sheets, and analyses logs of Swan's mining sites and business.
According to the filing, all this was done to "irreparably harm Swan’s ability to compete in the market."
As reported recently, the BTC fin-serv firm had postponed its plans to go public and parallelly shut down its mining unit and pulled back from its 'accelerated spending plan' for its core financial services business.
Lawyers representing Swan said,
"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.'"
They added,
"The evidence of Defendants’ brazen theft is overwhelming. [They] were stealing the crown jewels from Swan’s Bitcoin mining business."
Swan is seeking a permanent injunction against Proton to shield its mining business. It has also urged the court to compel the ex-executives to return stolen equipment and confidential details.
