Proton has rejected Swan Bitcoin’s accusations of trying to take over its mining business

What’s new? Proton Management has responded to Swan Bitcoin’s statement of claim, which alleges an attempted takeover of the latter’s mining business. Proton claims in the court filing that Swan Bitcoin does not have its own cryptocurrency mining business, and this activity is conducted through a separate entity, 2040 Energy, which Tether, the issuer of the largest stablecoin USDT, fully funds.

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What else is known? Both defendant Proton Management and plaintiff Swan Bitcoin own minority stakes in 2040 Energy. The lawsuit alleged that Proton enlisted former Swan employees to take over the business.

In turn, Proton claims that Swan, due to its dire financial situation, conducted a series of mass layoffs in July of this year. As a result, in early August, several key Swan employees left the company on their own, dissatisfied with its policies and development strategy, and moved to 2040 Energy to work on behalf of Proton.

Representatives of the defendant company emphasized that they were not seeking to harm Swan but to increase the value of their minority interest in 2040 Energy. Proton also denies receiving confidential commercial information from former Swan employees.

Proton seeks dismissal of the case and emphasizes that a California court cannot hear a lawsuit involving a company based in the British Virgin Islands that has no commercial ties to the state.

Swan Bitcoin itself claims that Proton Management came into existence as a result of collusion: employees allegedly agreed to collectively quit their jobs to start a competing company. They are also alleged to have stolen secret code from the company’s bitcoin mining monitoring software, as well as poached Swan Bitcoin’s suppliers and business partners.

According to the plaintiff, the implementation of this scheme was facilitated by Tether. Specifically, the USDT issuer sent Swan a notice of default, which provided legal cover for a hostile takeover of the mining business, the documents say.

As for the former employees, it is alleged that Proton CEO Raphael Zagury, who previously served as chief investment officer and head of mining at Swan, disrupted Swan’s work processes to induce employees to quit. He and his accomplices then attempted to force Swan CEO Cory Klippsten to resign and wind down the business.

It is also reported that Swan’s former vice president of institutional operations and research, Brett Healy, downloaded more than 300 confidential documents from the company's Google Drive. These include a mining inventory, performance data tables, a log of analysis of all the company’s farms, and other operations.

Just four days after Zagury, Healy, and other employees were fired from Swan, Tether announced that the day-to-day management of the 2040 Energy joint venture’s mining operations would be transferred to Proton.

Swan has asked the court for a jury trial and damages to be determined at trial.