The designer of a Chinese Chip who helped the firm, Bitmain Technologies Ltd., become the largest Bitcoin mining rigs maker of the world before he started his own business has been arrested. This has been confirmed by three people who are familiar with the issue. A Tech mastermind until the middle of 2016 with Bitmain, Yang Zuoxing, was held by the Shenzhen police end of October because of a legal dispute with his previous employer.
Prosecutors in the Nanshan district of the city said in a statement released last week, as reported on Bloomberg, "that Yang was arrested on suspicion of embezzlement," and that "legal procedures were ongoing." Relatively, the same statement excluded the 2nd of 3 Chinese characters that make up the full name of Yang, possibly to protect his identity. It did not mention Bitmain or MicroBT, the crypto-mining firm this tech genius founded 1 month after he quit Bitmain.
Crypto-Miners War
MicroBT has turned into a serious competitor, taking share away from Bitmain using its Whatsminder equipment. Additionally, while crypto-miners produce machines with similar prices and specs, they contend against each other to win tight chi supplies coming from foundries run by Samsung Electronics Co. and Semiconductor Manufacturing Co. Yang's arrest takes place as a competition between Bitmain and its competitors strengthens.
Bitmain and MicroBT representatives declined to make any comment on the issue. The Nanshan prosecutors' office did not respond instantly, as well, when requested to comment. Incidentally, Bitmain has fought several legal battles already against its top ex-staffers. Last year, this Beijing-based firm lost a court verdict against MicroBT over accusations that Yang's startup violated its patent rights. Earlier on, Bitman filed a case against 3 of its ex-employees who are said to have "started rival miming pool Poolin" for supposedly violating a "non-compete" agreement.
Yang's Arrest
The district prosecutor in Shengzhen stated on its website that it has recently permitted the arrest of the suspect in the accusation of criminal cases and embezzlement, which are still ongoing. And, while the prosecutor did not specifically say if the supposed embezzlement relates to the firm of Yang nor his then-employer, Bitmain, the report indicated the latter's move to escalate its unsuccessful civil lawsuit against Yang "to a criminal case by reporting to the Beijing police with charges against him" for infringement of trade secrets.
Yang was a director for mining chip design at Bitmain. As such, he was responsible for the development of the company's flagship, AntMinwe S7, and S9 models in 2016. Relatively, Bitmain earned approximately 1 billion in profits in the first half of 2018. Yang left the company to start MicroBT following his negotiations with the co-founders of Bitmain because the equity of the firm fell through. Late last year, the team of Yang successfully petitioned the Chinese intellectual property court to void to Bitmain's awarded patent, and thus, there was a dismissal of the civil case. The Microsoft BT launched its newest WhatsMiner M30 product last week, featuring a computing power at 88 tera hashes every second.
