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.

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.

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.

Yang Zuoxing image courtesy of Poolin