Bitcoin Mining Firm Proton Denies Stealing Swan Bitcoin's Business, Calls for Lawsuit Dismissal

The dispute centers around Swan's claims that Proton, led by former Swan employees, stole its mining business.

Bitcoin mining firm Proton Management is disputing allegations made by Swan Bitcoin in a recent lawsuit, firmly denying claims that Proton stole Swan’s mining business.

The dispute arose after a wave of resignations from Swan in August, with many of the departing employees joining Proton. Swan filed a lawsuit on September 25, alleging that Proton, led by former Swan employees, engaged in a scheme to take over Swan’s mining business.

However, Proton is now calling for the case to be dismissed, arguing that Swan’s claims are baseless. On September 30, Proton filed a motion to dismiss the lawsuit, stating that Swan’s claims are “fatally flawed.”

At the heart of Proton’s argument is the claim that Swan “does not have a mining business” to begin with. Proton asserts that the Bitcoin mining business in question, 2040 Energy, is a separate entity that was fully funded by Tether, the stablecoin issuer.

According to Proton, Swan only has a minority stake in 2040 Energy, and the company's actions are actually beneficial to Swan, as they could preserve or even increase the value of Swan's stake in 2040 Energy.

Proton characterizes Swan’s legal action as “litigation by ambush,” suggesting that Swan’s real motive is to disparage its former employees and gain leverage in a separate dispute with Tether.

The motion to dismiss also addresses Swan’s claims about stolen proprietary information and trade secrets. Proton questions whether any of the information mentioned in Swan’s complaint actually belongs to Swan, suggesting it may instead be the property of 2040 Energy.

The legal battle began on September 25 when Swan filed its lawsuit in a California court. The complaint names Michael Holmes, Swan's former Head of Business Development, as Proton's “ringleader.” It also identifies Raphael Zagury, Swan's ex-chief investment officer and mining head, as Proton's CEO.

Swan claims it was surprised by a wave of resignation letters in August, with many of the departing employees now working at Proton. However, these former Swan employees counter that their resignations were prompted by Swan’s “mismanagement,” which they allege negatively impacted 2040 Energy’s operations and growth prospects.

In its lawsuit, Swan is seeking several remedies. These include a permanent injunction against Proton to prevent further disruption of Swan’s Bitcoin mining business.

Swan is also asking the court to compel its former employees to return what it claims is stolen equipment and confidential material. Additionally, Swan has requested a jury trial and is seeking damages to be determined during the trial.

Proton's response also raises a jurisdictional issue, arguing that the California court lacks personal jurisdiction over Proton, which is incorporated in the British Virgin Islands. This legal technicality could potentially impact the case's progression.

As of now, Swan has not publicly responded to Proton’s motion to dismiss. The cryptocurrency community is watching this case closely, as its outcome could have implications for how disputes between companies and former employees are handled in the rapidly evolving digital asset industry.

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