Originally known as the Giant Nebula, the Blood Nebula gained notoriety 75 years ago during a scouting expedition. Surveyors found that several asteroids and planetoids within the nebula contained rich deposits of precious metals, gemstones, and radioactive elements used to make jump-drives and jump gates. Word spread quickly, and soon every prospector, entrepreneur, and mining corporation within 30 light-years rushed to the Giant Nebula to stake their claim.
Things seemed to go smoothly for the first year, but as more and more arrived to try and find their fortune the miners became more and more defensive of their mines. Prospectors fought with each other over claimed asteroids, entrepreneurs tried to get rich off of providing services and equipment to the prospectors at high prices, and corporations muscled in on rich deposits to forcibly take them over. Several mining gathered together in unions and conglomerates out of necessity to hold off the corporate incursions into their territory. With no planetary government holding jurisdiction over the Nebula, there was nothing preventing disputes from being settled by brute force and lethal methods. Many lives on both sides were lost, which led to the region being renamed "The Blood Nebula".
After several years of fending off armed attacks to their mining operations, a few corporations got together and built a jump gate near the Blood Nebula. With it's completion, the corporations could now tow large asteroids to the gate and ship them off to mine them in the safety of their home systems. This changed the focus of corporations from planetoids to asteroids, as the smaller stellar bodes could be moved to the jump-gate and sent through. Many of the asteroids were already claimed by mining guilds and individuals, which the corporations blatantly stole from under their noses (and their guns). The prospectors attempted to defend themselves with their freighters, some of which had been well-armed by this point. Miners teamed up to raid corporate convoys as they tried to tow the asteroids to the jump-gate. Many of these groups would evolve into the infamous Blood Nebula Pirates that still plague the region today.
After several decades of mining operations, it was determined that the cost of operations in the Blood Nebula were no longer reaching acceptable profit margins for the yields they were producing. The last of the mining corporations left the Nebula, powering down the gate as they went and removing it's power core. The miners were all gone; they had all left, died, or became pirates. The pirates who remained could have started mining what was left of the minerals in the nebula, but they had become so used to raiding for a quick profit that many groups simply kept raiding. The old corporate mining outposts were claimed by the pirates and turned into shadow ports and pirate bases. When the Union was formed, the Blood Nebula Pirates were recognized as a threat to commerce and interstellar safety within the Union's borders. Efforts have been taken to locate and destroy the Pirates, but many pirate bases had either been moved from their original positions or were locations protected as "corporate secrets" by the corporations who established those bases.