Swan Bitcoin sues former employees for stealing trade secrets to launch rival mining firm
Swan Bitcoin has filed a lawsuit in opposition to a number of the former staff of its mining enterprise for allegedly stealing proprietary software program and commerce secrets and techniques to launch a competing agency, Proton Administration.
In a Sept. 25 lawsuit filed with a Los Angeles federal court docket, Swan alleged that six of its former staffers conspired to “hurt Swan’s capability to compete available in the market” by stealing what the submitting dubbed as “crown jewels” from its mining enterprise.
Based in 2019, Swan Bitcoin provides monetary companies for traders and branched out to the mining sector after launching Swan Mining in 2023. The criticism alleges that the defendants executed a pre-planned scheme referred to as “rain and hellfire” to take over Swan’s mining enterprise from the within.
In line with Swan, the previous staff 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 agency behind USDT was particularly meant to supply “authorized cowl” for the misdeeds of the “copycat firm,” the criticism added.
Tether, a key funding associate, 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 traders, aiming to extend its capability to 100 exahashes by 2026. The current 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 similar time, Swan reportedly thought-about promoting its mining enterprise to Tether.
Swan argues the stolen info helped Proton acquire an unfair benefit within the competitive Bitcoin mining market.
The agency claims to own proof of the theft and subsequent cover-up makes an attempt. It’s submitting the lawsuit to guard its rights, accusing the defendants of commerce secret misappropriation, breach of contract, and aiding and abetting a breach of responsibility of loyalty.
Swan has requested a jury trial to find out the damages and requested the court docket to push for the return of stolen tools and the confidential materials in query whereas additionally searching for a everlasting injunction.
Core enterprise unaffected
Regardless of the authorized tussle, Klippsten has assured the group that the monetary companies agency has had a worthwhile 12 months, with a 132% year-on-year income improve, clarifying that the current information doesn’t have an effect on the core enterprise because the 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.
