A CHINESE chip designer who helped Bitmain Technologies Ltd. become the world’s largest maker of Bitcoin mining rigs before starting his own company has been arrested, according to sources familiar with the matter.

Yang Zuoxing, a tech mastermind with Bitmain until June 2016, was detained by police in Shenzhen at the end of October in relation to a legal dispute with his former employer, said the sources.

Prosecutors in Shenzhen’s Nanshan District said in a Dec. 12 statement that Yang was arrested recently on suspicion of embezzlement, and that legal procedures were ongoing.

The statement omitted the second of three Chinese characters that make up Yang’s full name, possibly to shield his identity. It didn’t mention Bitmain or MicroBT, the crypto-mining company Yang founded a month after quitting Bitmain.

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.

The arrest of Yang comes as competition between Bitmain and its rivals intensifies. While MicroBT’s flagship Whatsminer 20 series are the best-selling Bitcoin mining rigs so far this year, Yang’s absence has halted his company’s ability to make key decisions, including on pricing, said the sources.

(SD-Agencies)