Gaming Company Fined $1 Million After Using Players To Mine Bitcoin

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Bitcoin enthusiast Mike Caldwell poses at his office in Sandy, Utah, September 17, 2013.

A gaming software company behind anti-cheating software for the popular Counterstrike game has been fined $1 million after a software update secretly added code that would mine for bitcoin without the users' knowledge, Robert McMillan of Wired reports.

About 14,000 customers of E-Sports Entertainment Association (ESEA) were infected by the code, which mined about 30 bitcoins over a period of two weeks. The company blamed a rogue engineer for the malicious code.

The software was designed to mine the cryptocurrency only when people weren't active on their computers, according to Forbes' Kashmir Hill. But one gamer noticed his computer was working much harder than usual and warned others of a possible Bitcoin botnet in April.

“These defendants illegally hijacked thousands of people’s personal computers without their knowledge or consent, and in doing so gained the ability to monitor their activities, mine for virtual currency that had real dollar value, and otherwise invade and damage their computers," said Acting N.J. Attorney General John Hoffman, in a press release.

From Wired:

Though they reached a settlement, ESEA and the New Jersey AG disagree over the facts of the case. The AG’s office says that company co-founder Eric Thunberg and software engineer Sean Hunczak were both involved in the scam. In a statement posted to its website, ESEA said the software was the work of a single engineer, presumably Hunczak, adding that the “press release issued by the Attorney General about our settlement represents a deep misunderstanding of the facts of the case, the nature of our business, and the technology in question.”

The company must pay $325,000 of the fine upfront, but will be required to pay the rest if they are caught misbehaving in the next ten years.



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