Bitcoin company Swan alleges in a lawsuit filed Wednesday that former employees of the company, including former executives, conspired to carry out a “rain and hell” scheme to usurp the company’s Bitcoin mining operations.
The company further claims that the scheme was backed by crypto giant Tether, which is responsible for issuing USDT, the industry’s largest stablecoin by market capitalization.
In addition to stealing vendors and business partners, the former employees also stole “highly proprietary code” from Swann’s Bitcoin mining monitoring software, the complaint filed in the U.S. District Court for the Central District of California alleges. claims. Swan Bitcoin said its employees conspired to collectively resign and form a competing company called Proton Management.
“The evidence of defendants’ brazen theft is overwhelming,” Swan’s attorney wrote in the complaint. “[The former employees]were stealing the crown jewels from Swann’s Bitcoin mining operations.” Representatives for Tether and Proton did not immediately respond to Decrypto’s request for comment.
Swann’s lawyers say Brett Highley, Swann’s vice president of institutional operations and research and a former executive at the Bitcoin company, has obtained more than 300 confidential documents, including mining inventories, performance data sheets, and Bitcoin analysis logs. He claimed to have downloaded it from Swan’s Google Drive. All of the company’s mining sites and operations.
In addition to diverting Swan’s financing partner Tether into their own operations, Proton’s employees also accused Swan’s mining stakeholders of He allegedly solicited, the complaint states. The scheme, Swan alleges, depended in part on Tether delivering a “notice of default” to Swan that would provide “legal cover” for a hostile takeover.
According to the complaint, Proton Chief Executive Officer Rafael Zagli (then Swan’s chief investment officer) used the company to “sow dissent and confusion” at Swan in an effort to encourage Swan employees to leave. It was a joint effort. From there, Zagli and his alleged co-conspirators tried to force Swan CEO Klipsten to resign and ensure that Swan accepted a “capitalization” from Tether. The Bitcoin company’s lawyer said that it was planned to do so.
Just four days after employees, including Zagri, who was also the company’s mining director, left Swan, Tether, the financing partner for Swan’s mining operations, announced that Defendant Proton would take over ‘day-to-day operations’. Swann was notified of “the joint venture’s control of Bitcoin mining,” the lawsuit states.
Swan continues to investigate the circumstances surrounding the resignations of former executives and employees, as well as allegations that the company collected proprietary data and trade secrets, according to the complaint. A representative for Swan declined Decrypto’s request for comment.
The Bitcoin company is seeking a permanent injunction against Proton to prevent it from further interfering with Swann’s mining operations, and to force former employees to return stolen equipment and “confidential materials.” asking the court. Swan asked the court for a jury trial and determination of damages at trial.
Editor’s note: This article was updated after publication to include additional details about Swann’s lawsuit.
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