China: Former Bitmain Chip Designer Arrested on Suspicion of Embezzlement

According to a report by Bloomberg published on December 16, 2019, Yang Zuoxing, a former cryptocurrency mining chip designer who worked with Bitmain, has been arrested in Shenzhen, China, on suspicion of embezzlement.

Bitmain Rival Founder Arrested

The cryptocurrency mining space has been getting increasingly competitive and congested with every passing year. Since the famous 2017 initial coin offering (ICO) boom, the digital currency mining space has attracted a lot of market players because of its lucrative appeal.

Of late, however, the mining space has seemed remarkably drier than usual which also reflects in the various controversial matters in the space. In an official statement dated December 12, 2019, prosecutors in Shenzhen stated that they had arrested MicroBT founder Zuoxing on suspicion of him indulging in illicit activities.

Notably, the official statement by the prosecutors omitted the second of three Chinese characters that make up Zuoxing’s full name, presumably to shield the suspect’s identity. The statement didn’t mention the Bitmain or MicroBT. For the uninitiated, MicroBT is a cryptocurrency mining firm founded by Zuoxing just months after he quit Bitmain in June 2016.

With regard to the market power of MicroBT, the report reads in part:

“MicroBT has grown into a serious contender, clawing market share away from Bitmain with its Whatsminer equipment. While crypto-miner makers produce machines with similar specs and prices, they compete against each other for tight chip supplies from foundries operated by Taiwan Semiconductor Manufacturing Co.and Samsung Electronics Co.”

Panning for Crypto

The arrest of Zuoxing comes at a time when the crypto mining industry is undergoing a tectonic shift in terms of its modus operandi. The entry of a plethora of crypto mining firms in the space has significantly trimmed the profit margins of the existing players who had, for long, enjoyed supernormal profits on minimal investments.

It’s worth noting that MicroBT’s flagship mining equipment Whatsminer 20 series has proved itself to be the most commercially successful Bitcoin mining rigs of 2019.

The unarguable leader in the crypto mining space, China-based Bitmain continues to stride ahead, albeit slowly, within the still embryonic digital currency mining industry. BTCManager reported on October 21, 2019, how Bitmain launched a 50MW Bitcoin mining farm in Rockdale, Texas.