Block reward mining hardware manufacturer Bitmain is facing an investigation by law enforcement agencies in Taiwan over concerns about the company’s human resources practices in the country.
The Taiwan New Taipei District Prosecutors Office is reported to have carried out inspections at seven office locations in Taiwan of companies linked to Bitmain. Investigations are also underway into 19 executives connected to the companies involved.
According to local press reports, authorities probed company materials including books, contracts, job offers, computer logs, phone records, confidentiality agreements and other documents.
As a result of the investigation, authorities have also discovered that Bitmain has incorporated two subsidiary companies in Taiwan within the semiconductor sector, contrary to local laws designed to protect the sector from Chinese investment.
The companies under investigation are accused of hiding their ties to Bitmain, as a mainland-China based company, despite helping poach personnel from the semiconductor industry in Taiwan.
The block reward mining company is accused of securing the services of hundreds of engineers from Taiwan over the past three years, offering in many cases to double current salaries, despite regulations that outlaw these kinds of practices.
The semiconductor industry, central to Taiwan’s economy, is subject to local intellectual property protection measures, and violations of these measures are prosecutable by the authorities in Taiwan.
It is currently illegal for China-based companies and individuals to invest in semiconductor businesses in Taiwan. Chinese companies or individuals looking to set up Taiwan subsidiaries in the sector are also required to obtain pre-approval from Taiwan’s Ministry of Economic Affairs in order to establish legitimately in the country.
The allegations against Bitmain and the connected firms suggest there may have been a violation of these laws and regulations.
At the time of press, Bitmain had yet to respond to requests for comment.
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