17.04.2021

Founder of Bitmain Rival Held by Police Over Possible IP Dispute

The source confirmed to CoinDesk that Yang was taken away by local police at the end of October – after the unexpected return to Bitmain of Jihan Wu, co-founder of the firm. Wu seized control of Bitmain last week by ousting the company’s other co-founder and then-chairman Micree Zhan.

Zuoxing Yang, founder and CEO of Shenzhen-based bitcoin miner maker MicroBT, is being held by local police to assist an investigation, CoinDesk has learned.

The investigation is likely over allegations of intellectual property infringement by the firm related to the technology of its rival Beijing-based crypto mining giant Bitmain, according to one source close to MicroBT with knowledge of the matter. The news was first reported by Chinese crypto news source BlockBeats.

Yang was formerly processor design director at Bitmain, responsible for developing the firm’s flagship AntMiner S7 and S9 models around 2016. However, he left the company and raised over $20 million to found MicroBT – which produces the WhatsMiner range of mining devices – after discussions with Zhan and Wu for stock options fell through.

Bitmain has already sued Yang and his company in 2017 over alleged infringement of a patent that Bitmain was granted for bitcoin miner-related technology. In 2018, Yang’s legal team successfully appealed to a court in China to have the patent revoked, after which the case was dismissed.

The source said that at this point it’s not clear how and why a police investigation has been opened over possible intellectual property infringement.

MicroBT has recently been posing increased competition to top miner manufacturers such as Bitmain and Canaan, having grown its market share in the bitcoin mining industry.

The firm had not responded to a CoinDesk request for comment at press time. Bitmain did not wish to comment when asked.

Fowler May Change ‘Not Guilty’ Plea in Crypto Capital Laundering Case

Reginald Fowler, one of the individuals accused of running a “shadow banking” service for cryptocurrency startups, is expected to plead guilty to at least some charges during a court hearing next month.

According to a letter written by Assistant U.S. Attorneys Jessica Fender and Sheb Swett on behalf of U.S. Attorney Geoffrey Berman, “it is anticipated that defendant Reginald Fowler will enter a change of plea at the next court conference.”

U.S. District Judge Andrew Carter, who is overseeing the case in the Southern District of New York, endorsed the letter on Thursday, canceling a hearing set for Jan. 8, 2020 and setting one for Jan. 10, 2020.

Fowler, one of the alleged co-founders of payment processor Crypto Capital, was indicted and arrested earlier this year on charges of conspiracy to commit bank fraud, bank fraud, conspiracy to operate an unlicensed money transmitting business and operation of an unlicensed money transmission business, alongside Israeli national Ravid Yosef. According to an indictment, the pair opened bank accounts at various financial institutions to store funds on behalf of cryptocurrency exchanges, but told the banks they would process real estate transactions.

While Yosef was also charged, she has not yet been arrested.

Fowler pled “not guilty” to all four charges during a hearing in June 2019.

Crypto Capital is otherwise known as the payment processor used by Bitfinex, QuadrigaCX, CEX.io and other exchanges in the past, after these firms had difficulty securing banking services.

Bitfinex famously stored close to $1 billion with Crypto Capital, which it lost access to after the company’s bank accounts were frozen by law enforcement authorities in multiple countries.

All told, Bitfinex lost $850 million, as revealed by the New York Attorney General’s office in an ongoing inquiry begun in April.

Bitfinex filed for a subpoena to depose individuals associated with Crypto Capital in an effort to regain its funds.

According to the subpoena, Bitfinex was unaware that Fowler had opened the bank accounts holding its funds in his name, rather than Crypto Capital’s.

Spread the love
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Leave a Reply

Your email address will not be published. Required fields are marked *