A gaming company based out of New York has reached a settlement with the New Jersey Attorney General’s office of $1 million for running what could be described as a Bitcoin mining botnet scheme on user computers.
E-Sports Entertainment [ESEA], which offers gaming-related software [that cost $6.95 per month] essentially “full administrative access to users’ computers” — which included being able to take screenshots, view what’s on the screen, and even see movements of the cursor. That’s not all, the software contained code that turned user machines into Bitcoin miners when users’ graphic cards weren’t being used heavily.
In a matter of two weeks back in April, the company was able to mine 29 Bitcoins using their customers’ machines (a value of nearly $15,000 at the current exchange rate).
When a user discovered the code and warned fellow users, the company made the following statement:
With the whole fervor around bitcoin, we did conduct some internal tests with the client on only two of our own, consenting administrators’ accounts to see how the mining process worked and determine whether it was a feature that we might want to add in the future. We thought this might be an exciting new tool that we could provide to our community. Ultimately, we decided that it was not.
E-Sports says a rogue employee was behind the actual execution of the Bitcoin mining scheme and not an action taken by the company as a whole. E-Sports has since donated the Bitcoin proceeds to a cancer charity.
$325,000 of the $1 million settlement will be paid to the state of New Jersey, and the remainder will be suspended given E-Sports fully satisfies settlement terms and keeps out of trouble.
The company has released the following statement on their website:
As a result of the Bitcoin incident that occurred earlier this year, an investigation was opened by the Attorney General of New Jersey. We cooperated fully with the investigation and agreed to settle the matter so that we would be able to return our full attention to our business and serving the needs of the ESEA community.
We want to make it clear to our community that we do not agree with the Attorney General’s account of the Bitcoin incident.
The settlement that was signed makes explicitly clear that we do not agree, nor do we admit, to any of the State of New Jersey’s allegations. 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.
Moving forward, it is our intent to provide our community with confidence that ESEA will be taking every possible step to protect your privacy. The employee who was responsible for the Bitcoin incident was terminated, and we are taking steps to ensure that nothing like this can happen again. In the weeks to come, you can expect to see a notice posted on our website that provides a detailed explanation of our privacy policy in a manner that can be easily understood. Additionally, regular audits will be conducted by a third party specialist in order to ensure that we maintain a secure environment and protect your privacy.
The ESEA Client remains to be a powerful tool that we will continue to offer our customers for a fair online video game experience. We remain committed to moving forward and focusing on delivering a high quality online video game experience for our customers.
