Swan Bitcoin Sues Former Executives for Alleged Stealing of BTC Mining Businesses

Swan Bitcoin has sued several former employees, accusing them of illegally taking highly valued components of its BTC mining business.

Filed on September 25, the lawsuit claims that these executives, who now run Proton Management, conspired to misappropriate Swan’s intellectual property and obtained funding from Tether to create a “counterfeit competitor.”

Plan of rain and hellfire

The court filing alleges that Proton Management executives executed a “rain and hellfire” plan by stealing Swan’s proprietary software, the Bitcoin Network Operating Center (BNOC), and sensitive documents for his new company. These materials included confidential business strategies, customer information and key operational data.

The financial services firm also claims that Proton persuaded Tether, its financial backer, to cut ties and support it to “irreparably harm Swan’s ability to compete in the market”. The lawsuit describes the stablecoin issuer as playing a key role in the hostile takeover by providing “legal cover” and cites an email discussing its plan to send a “default notice” to the company .

The story goes back to mid-2023, when CEO Cory Klippsten partnered with Tether CFO Giancarlo Devasini on a Bitcoin mining company in Australia. Swan provided management, while Tether funded the project through its subsidiary BFX Ventures. In July 2023, they created 2040 Energy, a mining entity funded by Tether and jointly overseen by both companies.

Tensions arose in early 2024 when Swan’s chief investment officer Raphael Zagury and key consultants allegedly conspired to change control of the mining business. In June, discussions began to spin off mining operations, with Tether showing interest in backing a new entity.

In July, Zagury and Devasini finalized the plans, adding the former to 2040 Energy’s board and moving assets to Proton. In early August, several executives resigned and Tether informed Swan that Proton would replace them in the mining deal.

Swan’s response and legal action

Swan claims he was blindsided by the stablecoin issuer’s resignations and actions, accusing Proton of conspiring to abuse its employees and take over its mining business. The lawsuit seeks a permanent injunction to prevent the new company from further disrupting its operations, as well as the return of stolen equipment and confidential material.

The company is also seeking a jury trial and damages to be determined in court. In addition to these legal challenges, Swan has been forced to delay its plans for an IPO and lay off employees following its decision to exit the mining business.

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