Former Bitmain Chip Maker in Police Custody for Alleged Embezzlement
Former Bitmain Technologies chip maker and founder of Bitmain rival MicroBT, Yang Zuoxing, has been reportedly arrested by the Shenzhen police. Yang’s arrest comes amid the ongoing battle between MicroBot and Bitmain, along with the latter’s leadership crisis.
On the other hand, another major bitcoin chip manufacturer, Canaan is also not having the best of times. Following a recent listing on NASDAQ, reports emerged that the company’s stock price value plummeted. The company was earlier listed on NASDAQ.
MicroBT CEO In Police Custody Again
According to a report by BNN Bloomberg on Monday, December 16, 2019, three anonymous sources revealed that Yang has been arrested by law enforcement agents in Shenzhen. In an earlier statement by prosecutors from the Nanshan District in Shenzhen, the MicroBT founder is in police custody on allegations for embezzlement.
However, the statement did not include Yang’s full names, neither did it include the names “Bitmain” or “MicroBT”. The supposed embezzled fund is about $15,000 (100,000 yuan)
After leaving China-based bitcoin mining manufacturing giant in 2016, Yang went on to found a rival bitcoin mining equipment firm, MicrBT. There has been an ongoing battle between MicroBT and Bitmain, with the latter accusing the former of violating patent rights.
Later, the Shenzhen authorities invited the MicroBT CEO for questioning in October 2019. Some sources claimed that the investigation could be related to allegations by Bitmain of an intellectual property infringement by MicroBT.
Notably, Yang’s startup has posed a threat to big industry players like Bitmain, with one of MicroBT’s bitcoin mining rigs, the Whatsminer 20 series, being a best-seller so far in 2019.
It is not the first time Bitmain is having issues with ex-employees. As reported by Blockonomi back in June 2019, the bitcoin mining manufacturing behemoth sued founders of rival mining pool, Poolin. The founders, who are ex-Bitmain employees, were accused of contravening a non-compete agreement.
As at press time, neither Bitmain nor MicroBT nor the Nanshan district prosecutors have commented on the issue. Furthermore, Some sources familiar with Yang’s arrest revealed that the absence of the MicroBT CEO has adversely affected the company, as the firm is currently unable to make salient decisions such as pricing.
Bitmain Co-founders Still at Loggerheads
In a related development, the leadership tussle within Bitmain is still ongoing with Jihan Wu attempting to strengthen his hold on the company. Wu returned to Bitmain in October 2019 and carried out some organizational restructuring.
As part of the restructuring process, Wu reportedly ejected Micree Zhan, another co-founder out of the company and further forbade everyone from taking orders from Zhan or attending his meetings.
Things got messier following response from Zhan. In an open letter, the co-founder saw the ousting as a betrayal and further threatened to take legal action.
Amid the Bitmain leadership saga, the mining giant is targeting the U.S. market for its IPO, after an unsuccessful attempt with the Hong Kong Stock Exchange. The mining company reportedly applied with the U.S. Securities and Exchange Commission (SEC).
Also, Bitmain in October 2019, launched an enormous crypto mining facility in Rockdale, Texas. The facility is a 50 megawatts (MW) farm on a 33,000-acre site. Furthermore, the mining behemoth is looking to expand the facility to more than 300 MW, which, if carried out, would see Bitmain owning the world’s largest bitcoin mining facility.
Another crypto mining manufacturing giant, Canaan, suffered a major setback recently as the company’s stock price crashed according to market activity data on NASDAQ.
Canaan initially had two failed IPO filings in Hong Kong and China. Later, the mining firm announced a U.S. IPO filing on NASDAQ.
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