Proton Management Challenges Swan Bitcoin’s Mining Business Claims

TLDR

• Proton Management claims Swan Bitcoin doesn’t own a mining business
• Swan’s alleged mining business is part of 2040 Energy, funded by Tether
• Swan only holds a minority stake in 2040 Energy
• Ex-Swan employees resigned and were hired by Proton to work on 2040 Energy
• Proton denies using Swan’s proprietary information or trade secrets

In a recent court filing, Proton Management has responded to allegations made by Swan Bitcoin, shedding light on a complex dispute within the cryptocurrency industry.

The case centers around Swan Bitcoin’s claims that Proton and six former Swan employees conspired to “steal” its mining business.

According to Proton Management’s court filing on Monday, Swan Bitcoin does not actually own a mining business of its own.

Instead, what Swan has referred to as its mining business is actually a separate entity called 2040 Energy. This company, Proton claims, is fully funded by Tether, a major player in the cryptocurrency world known for issuing the USDT stablecoin.

The filing further states that Swan Bitcoin only maintains a minority stake in 2040 Energy and does not control the company.

Proton argues that the work and innovation of the individual defendants, who are former Swan employees, led to the successful development of 2040 Energy’s mining operations.

The dispute appears to have its roots in recent financial difficulties at Swan Bitcoin. Proton’s filing mentions that Swan conducted significant layoffs in July 2024 due to a precarious financial situation.

Following these layoffs, in early August, several key employees voluntarily resigned from Swan. These employees reportedly left because they believed the company was being mismanaged.

After leaving Swan, these former employees were hired by Proton to continue their work on 2040 Energy. Proton contends that this move is actually beneficial to Swan, stating,

“Far from damaging Swan, Proton is enhancing the value of its minority stake in 2040 Energy.”

A key point of contention in the case is the alleged use of proprietary information or trade secrets. Proton firmly denies using any such information belonging to Swan.

Proton questions whether the information in dispute even belongs to Swan, suggesting it may actually be the property of 2040 Energy.

In its defense, Proton asserts that Swan has not suffered any damage from Proton’s activities. The company is seeking dismissal of the case on multiple grounds, including improper service of the lawsuit and lack of jurisdiction.

Proton argues that as a British Virgin Islands-based company with no commercial ties to California, the courts in that state have no jurisdiction over it.

It’s worth noting that while Tether is mentioned in the dispute, it is not a named defendant in the lawsuit. A spokesperson for Tether has previously denied any implications of wrongdoing in comments to CoinDesk, a cryptocurrency news outlet.

The case highlights the complex relationships and ownership structures that can exist within the cryptocurrency industry.

It also underscores the potential for disputes to arise when employees move between companies in this rapidly evolving sector.

As the legal proceedings continue, the cryptocurrency community will be watching closely to see how this dispute is resolved.

The outcome could have implications for how ownership and control of mining operations are understood within the industry.

The case is still in its early stages, and it remains to be seen how the court will rule on Proton’s motion to dismiss. Regardless of the outcome, this dispute serves as a reminder of the legal and operational challenges that can arise in the fast-paced and often complex world of cryptocurrency businesses.