‘Rain and hellfire’: Crypto firm’s ex-employees steal data to start ‘counterfeit’ rival

In an alarming, “brazen theft,” a new lawsuit filed last week in California alleges that several contractors and employees at Swan Bitcoin coordinated to steal “highly proprietary code” to establish a rival firm now called Proton Management.

Several contractors and employees at Swan Bitcoin coordinated to steal “highly proprietary code” in order to establish a rival firm, now called Proton Management, according to a new lawsuit filed last week in California.

The lawsuit alleges that the new firm used prominent stablecoin issuer Tether, a Swan Bitcoin financing partner, to gain "legal cover" for their actions and remove Swan Bitcoin from a joint venture with Tether. The stablecoin issuer has denied any wrongdoing in the scheme.

Swan Bitcoin alleges in the legal complaint that “[the ex-employees] were stealing the crown jewels from Swan’s Bitcoin mining business.”

"They hatched a plan to steal Swan's mining business from the inside, usurp Swan's role, and cut Swan out from the Tether joint venture. They dubbed it ‘rain and hellfire.’"

The move was designed to “irreparably harm Swan’s ability to compete in the market,” the firm highlighted in the lawsuit. Swan Bitcoin, a bitcoin financial services firm, hopes the complaint will result in former employees returning confidential company data and equipment, and also hopes to stop Proton Management from continuing its operation.

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In the lawsuit, the California-based firm alleges that ex-employee Brett Hiley and his colleagues stole over 300 files from the company’s Google Drive account. Hiley, who was the vice president of institutional operations and research, specifically took spreadsheets of Swan Bitcoin’s mining inventory, performance data, and other proprietary data essential to its work. According to the lawsuit, his firm allegedly stole trade secrets related to the "mining processes developed through testing, mining performance data, data related to Swan's mining inventory, mining operations and machine performance and configuration, financial modeling and information, weekly reports of all operations, ongoing deals with Swan business partners, and pricing information," the company said.

Tether has not been implicated in the scheme. "While Tether is not a named defendant in the case, we have taken note of the claims and deny any implications of wrongdoing," the stablecoin issuer told Cointelegraph.