Former Bitmain developer and founder of the mining equipment manufacturer MicroBT was arrested in China for embezzlement. MicroBT assets frozen by court order.

Yang Zuoxing, a former director of chip design at the mining giant Bitmain, and currently one of the founders of Bitmain's rival mining equipment manufacturer MicroBT, was arrested in China and stays in custody since late October, Caixin Global reports. The People’s Procuratorate of Nanshan district in the southern Chinese tech hub accuses Zuoxing of embezzling around 100,000 yuan ($14,339).

It is Zuoxing who is believed to be the developer of the most successful Bitmain's ASIC models, AntMiner S7 and S9. Bitmain earned $1 billion from the sale of these models in 2017 and the same amount in the first half of 2018.

Yang left Bitmain in 2016 after a dispute over the distribution of shares with one of the founders of Bitmain, Micree Zhan. After that dispute, he founded his own company MicroBT. In July 2017, Bitmain sued Yang for violating intellectual property rights, claiming he violated the patent granted by Bitmain for bitcoin mining equipment. In October 2018, Yang's team annulled the patent issued by Bitmain through the court, and the civil case against Yang on the violation of intellectual property rights was dropped.

MicroBT produces bitcoin mining machines under the WhatsMiner brand.

According to CoinDesk, MicroBT managed to significantly increase its share of the mining equipment market in recent years, while Bitmain was losing ground. Yang was detained by police after Jihan Wu, Bitmain's co-founder, who defeated his rival Micree Zhan, regaining control of the company.

It is still unclear whether Bitmain was involved in Yang's current arrest.

MicroBT and Bitmain declined to comment.