Exclusive: Yang Zuoxing of Shenma Mining Machine may be involved in two criminal cases and has been released on bail before the Spring Festival (attached with Yang's case timeline)

Wu Blockchain learned from an insider that Yang Zuoxing, the founder and CEO of Shenma Mining Machine, had been released on bail before the Spring Festival and is expected to enter the court review stage later. If the amount of 100,000 yuan reported by Caixin is followed, the sentencing standard should be imprisonment or detention of less than 5 years.

In addition, Wu Blockchain learned that in addition to the crime of embezzlement approved for arrest by the Nanshan Procuratorate of Shenzhen, the crime of infringement of commercial secrets being investigated by the Haidian District of Beijing has not been closed. In other words, Yang Zuoxing may be suspected of two criminal cases at the same time, which makes the case extremely complicated.

The local government's protection of local enterprises has also become a factor affecting the case. Shenma pays taxes in Nanshan District, Shenzhen, while Bitmain pays taxes in Haidian District, Beijing, Bao'an District, Shenzhen, Fuzhou and other places. The degree of protection provided by Nanshan District to Shenma has also become one of the factors affecting the final outcome of the case.

Timeline of Yang Zuoxing case:

At the end of October 2019, Yang Zuoxing, the founder of Shenma Mining Machine, was taken away by the police for investigation after Bitmain reported the case for infringement of trade secrets.

In early December 2019, the Nanshan District Procuratorate of Shenzhen approved the arrest of criminal suspect Yang Zuoxing on charges of embezzlement .

In January 2020, Yang Zuoxing was released on bail pending trial.

At the end of February 2020, it will enter the court review stage.

On December 12, the China Procuratorate website published this information: Recently, our court approved the arrest of the suspect Yang Mouxing for the crime of occupational embezzlement. At present, the case is being further processed. Wu said that the blockchain confirmed from multiple channels that Yang Mouxing in the article is Yang Zuoxing, the founder of Shenma Mining Machine.

According to Caixin, Yang Zuoxing was suspected of embezzling 100,000 yuan in office.

100,000 yuan is considered a relatively large amount. According to the law, if a person in a company, enterprise or other unit uses his or her position to illegally take the property of the unit for personal use, and the amount is relatively large, he or she shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention.

Generally speaking, from the time the procuratorate approves the arrest to the time the case is transferred to the court, the public security organs need to conduct an investigation, which takes two months. After the procuratorate deems it appropriate to prosecute, the court has a corresponding review period, which is three months for ordinary procedures. Judging from this period, Yang Zuoxing's case is likely to enter the court review stage.

According to people familiar with the matter, the case of infringement of trade secrets investigated in Haidian District, Beijing has not yet been closed. However, it is relatively difficult to obtain evidence of infringement of trade secrets, and whether Bitmain can provide detailed evidence is crucial.

For the crime of infringing on commercial secrets, the offender shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall be fined or fined alone; if the consequences are particularly serious, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall be fined.

According to people familiar with the matter, after Yang Zuoxing was investigated, Shenma Mining Machine did not appoint a new CEO, but the heads of various fields jointly maintained the company's operations. Some customers who bought futures sought refunds due to concerns about Yang Zuoxing's case.

Shenma's sales director previously disclosed that the sales volume of the M20 series in 2019 was 600,000 units. It is expected that with other products, the total sales volume may reach 1 million units. However, due to the low sales price of Shenma mining machines, the profit in 2019 was not high, and the company's own funds were limited, so it often adopted the strategy of starting manufacturing after the customer paid.

In 2019, Shenma relied on price wars to carve up the market share of Bitmain, but this was largely due to Zhan Ketuan's wrong sales strategy. After Wu Jihan returned and launched the three-pronged sales strategy, the sales of Bitmain's S17 high-computing power mining machine rebounded. Currently, the price of Bitcoin is stable at around US$10,000, but major mining machine manufacturers have been affected by the epidemic, resulting in insufficient production capacity and some mines being unable to start work.