What caught our eye this week

Swan Bitcoin is suing former employees, contractors, and two companies created by its former employees for alleged theft of elements of its bitcoin mining business.

This is a repost of the Blockspace Newsletter’s Friday recap. Subscribe here to get this and our Tuesday newsletter in your inbox weekly.

Swan claims that its former employees, in the weeks leading up to their August 8 resignation, “cloned and exfiltrated highly proprietary code from Swan’s Bitcoin mining monitoring software” from Swan’s GitHub. Swan refers to these documents and codes as the “crowned jewels” of its mining business. 

“Over a period of several weeks in July and August, Defendants and other agents hatched and executed a ‘rain and hellfire’ plan to steal Swan’s billion-dollar Bitcoin mining business,” a court document dated September 25, 2024 reads.

Swan established its mining business in July of 2023 in a joint venture with stablecoin issuer Tether, which financed the operation. Swan began its mining business at a site in Tasmania, Australia before deploying additional hashrate at hosting sites in other areas.  Per the filing, Swan and Tether’s joint venture managed 12 EH/s as of July 2024.

Days after the defendants’ mass resignation on August 4, 2024, Swan claims that Tether informed the company that it would put Proton Management, a firm created by the Swan defectors, in charge of the joint venture’s mining operations (notably, Swan is not bringing the suit against Tether). 

Blockspace broke this story yesterday and will continue to update our article as the story develops.

Bitcoin News

Inside the Biden Admin’s plot to Debank Crypto

• In the third installment of his Chokepoint 2.0 series with Pirate Wires, Castle Island Ventures’ Nic Carter reveals through new bankruptcy filings and confidential interviews that Silvergate could have survived if had not faced pressure and opposition from regulators. This information flies in the face of prevailing narratives from the Biden administration and Elizabeth Warren. Silvergate’s downfall may have been the cause of the 2023 regional banking crisis that took down Silicon Valley Bank, Signature, and First Republic

Bhutan has nearly ⅓ of it’s GDP in Bitcoin

• Bhutan announces that it has over $780 million (13,000+) in Bitcoin. This is over ⅓ of the small countries’ annual GDP. The country mined this bitcoin in a partnership with Bitdeer.

Citrea launches public testnet

• Citrea, an EVM compatible rollup on Bitcoin, opened their testnet to the public this week. The testnet includes a “near complete” version of Clementine, their BitVM powered Bitcoin bridge.

Chart of the week

The “HODL Cave” from Unchained shows the spread of historical returns of investors who held bitcoin over a given duration. The smaller the “cave” the tighter the spread of returns from Bitcoin hodlers.