This article details a dramatic corporate conspiracy within the Bitcoin mining industry. Former Swan employees, led by Raphael Zagury (Swan’s ex-Chief Investment Officer and Head of Mining), orchestrated a plan to take over Swan’s mining operations and potentially its entire business. This was achieved through a series of coordinated actions: stealing proprietary code, downloading confidential documents, soliciting Swan employees to join their new venture, and ultimately causing Swan to fall apart financially. The text alleges that Swan’s funding partner, Tether, was complicit in the scheme, possibly acting to protect its own interests by eliminating Swan as a competitor. This exposé reveals a complex web of betrayal, theft, and corporate intrigue in the competitive world of bitcoin mining.

Link to lawsuit https://drive.google.com/file/d/1hmhVlImvV7vhjhqMOyfBChFM6DgZ5cJC/view

Swan Bitcoin vs. Proton Management: FAQ

What is the lawsuit about?

Swan Bitcoin, a leading Bitcoin mining company, alleges that eight individuals, all former consultants or employees, conspired to steal trade secrets and proprietary information to launch a competing company, Proton Management. Swan claims these individuals orchestrated a “rain and hellfire” plan to download and exfiltrate sensitive data, including Swan’s proprietary Bitcoin Network Operating Center (BNOC) code, hash-rate optimisation techniques, financial models, and client data.

What is Swan Bitcoin accusing the defendants of doing?

Swan Bitcoin accuses the defendants of:

• Trade secret misappropriation: Stealing confidential information related to Swan’s Bitcoin mining operations, including its BNOC software, hash-rate optimisation strategies, and financial models.
• Breach of contract: Violating confidentiality agreements by disclosing sensitive company information to unauthorised parties.
• Conversion: Wrongfully taking control of Swan’s property, including laptops and digital files containing proprietary information.
• Unfair competition: Using Swan’s stolen trade secrets to gain an unfair advantage in the Bitcoin mining market.
• Conspiracy: Working together to systematically steal Swan’s business and harm its economic interests.

What is BNOC, and why is it so important?

BNOC stands for Bitcoin Network Operating Center. It’s a complex, proprietary software platform developed by Swan to manage its Bitcoin mining operations. BNOC gives Swan a competitive advantage by:

• Tracking and optimising mining data: BNOC monitors various factors like mining site performance, weather conditions, Bitcoin price, and hash-rate to maximize efficiency and profitability.
• Providing real-time insights: BNOC offers a detailed, real-time overview of Swan’s mining operations, allowing for quick identification and resolution of any issues.

Stealing BNOC essentially hands Proton Management the keys to replicate Swan’s successful mining infrastructure.

What is “hash-rate optimisation,” and why is it a trade secret?

“Hash-rate” refers to the computing power used in Bitcoin mining. The higher the hash-rate, the more attempts a miner can make to solve complex mathematical problems and earn Bitcoin rewards.

Swan has developed unique “hash-rate optimisation techniques” – proprietary methods for maximising their mining hardware’s computational power while minimising energy consumption and costs. These techniques are a result of Swan’s extensive research and testing, giving them an edge over competitors.

How did the defendants allegedly steal Swan’s information?

The lawsuit describes a pattern of deliberate data theft:

• Downloading sensitive files: Defendants allegedly downloaded thousands of files from Swan’s servers and cloud storage platforms, including BNOC code, financial records, client lists, and mining performance data.
• Using external storage devices: They allegedly transferred these files to personal hard drives to exfiltrate data from Swan’s systems.
• Cloning code repositories: Evidence suggests attempts were made to copy Swan’s entire BNOC codebase to external platforms.

How has Swan Bitcoin been harmed?

Swan Bitcoin claims it has suffered and continues to suffer irreparable harm, including:

• Loss of trade secrets: Proton Management now potentially possesses the knowledge to replicate Swan’s successful mining infrastructure and strategies.
• Damaged reputation: The alleged theft and subsequent legal battle can tarnish Swan’s reputation in the industry, making it harder to attract investors and partners.
• Financial losses: The lawsuit claims Swan’s Series C funding round and potential IPO plans were disrupted, forcing them to seek funding at a lower valuation.

What is Swan Bitcoin seeking in the lawsuit?

Swan is requesting the court to:

• Issue an injunction: Prohibit Proton Management from using or disclosing any of Swan’s stolen trade secrets.
• Force the return of stolen property: Order the defendants to return all laptops, hard drives, and other devices containing Swan’s proprietary information.
• Award financial damages: Compensate Swan for the financial losses incurred due to the alleged theft, including lost profits and diminished business value.

What is the current status of the case?

The provided text is an excerpt from Swan Bitcoin’s initial complaint. This means the case is in its early stages, and the defendants have not yet had their opportunity to respond to the allegations in court.