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Proton Management has called for the dismissal of a lawsuit brought by Swan Bitcoin, which accused the Bitcoin mining firm of stealing its mining business through a so-called “rain and hellfire” strategy. Proton, in a motion filed on September 30, vehemently denied the claims, calling them “fatally flawed” and arguing that Swan does not even have a mining business to begin with.
Case Background
The dispute centers around 2040 Energy, a Bitcoin mining company funded entirely by stablecoin issuer Tether. Proton claims that Swan’s allegations are nothing more than a tactic to gain leverage against Tether, adding, “Swan’s filings appear to be nothing more than ‘litigation by ambush’ aimed at disparaging its former employees and contractors.”
Proton further argued that Swan’s proprietary information and trade secrets were not used and questioned whether Swan had any ownership of the information in question, as it seemingly belongs to 2040 Energy.
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Proton’s defense noted Swan’s fragile financial position in mid-2024, which led to major layoffs in July. According to Proton, Swan’s instability is what prompted the creation of Proton Management, distancing itself from Swan’s struggles. Additionally, Proton acknowledged that Swan holds only a minority stake in 2040 Energy and claimed it is helping preserve the company’s value.
Proton Seeks Dismissal
Swan, however, sees the situation differently. The lawsuit, filed on September 25, accuses Proton of orchestrating a mass resignation of key Swan employees, including its former Head of Business Development, Michael Holmes, and its former Chief Investment Officer and mining head, Raphael Zagury.
Both have now taken leadership roles at Proton. Swan claims it was “blindsided” by the resignations and believes those employees took proprietary information and equipment with them.
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Proton’s legal team argues that Swan’s attempt to sue in California should be rejected due to jurisdictional issues, as Proton is incorporated in the British Virgin Islands. Additionally, Proton criticized Swan’s request for a permanent injunction and a jury trial, accusing the company of using the lawsuit as a strategic move rather than addressing legitimate concerns.
As the case unfolds, Swan is seeking damages and a court order compelling former employees to return what it claims is stolen equipment and confidential material.
