Swan Bitcoin, a financial services firm focused on Bitcoin, has initiated legal action against several former employees from its mining division.
Swan Bitcoin, a financial services firm focused on Bitcoin, has initiated legal action against several former employees from its mining division, accusing them of stealing proprietary software to establish a competing business.
The lawsuit, filed on September 25, alleges that these ex-employees formed a rival company, Proton Management, and persuaded Tether, a stablecoin issuer and Swan’s funding partner, to sever ties with Swan.
The complaint describes a scheme referred to as “rain and hellfire,” in which the former staff allegedly aimed to usurp Swan’s mining operations and disrupt its business model. Notably, Michael Holmes, Swan’s former Head of Business Development, is identified as the primary orchestrator of this plan, while Raphael Zagury, the former Chief Investment Officer, has taken on the role of CEO at Proton.
Swan claims that it was “blindsided” by a series of resignation letters received on August 8 and 9, followed by a notice from Tether on August 12 indicating that it would shift its mining funding agreement to Proton.
The filing suggests that Tether was intended to provide “legal cover” for this transition, which Swan argues is designed to “irreparably harm” its competitiveness in the market.
The firm had previously launched a managed mining service for institutional investors in May 2024, partnering with Tether with the goal of achieving 100 exahashes of computing power by 2026.
However, in July, Swan’s CEO Cory Klippsten announced potential closure of the mining service due to revenue challenges.
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