A New Jersey fraud investigation is underway, and four students at the Massachusetts Institute of Technology (MIT) are under the microscope for a hackathon project that involves bitcoin mining.
Dubbed “Tidbit”, the project allows website visitors to “loan” computing power to mine bitcoin (for the website operator) in exchange for not seeing advertisements.
The state of New Jersey isn’t seeing it as a simple exchange, however. Authorities has reportedly subpoenaed developers of the project — and they’re looking for source code and other documents related to the project.
At this juncture, the authorities are working to determine whether or not Tidbit is in violation of the New Jersey consumer fraud act.
The Institute has been criticized for not immediately backing their students’ project, but MIT’s President Rafael Reif has since written an open letter to students on the topic.
“I am grateful to all those who have written to me to express their concern about this situation, and I want to make it clear that the students who created Tidbit have the full and enthusiastic support of MIT,” he wrote.
Reif notes that the school’s Chancellor and Provost have met with the students, and MIT’s General Counsel have reached out to the Electronic Frontier Foundation (EFF) to provide the students with pro bono legal representation.
“Beyond this specific case, I believe we should provide our student inventors and entrepreneurs with a resource for independent legal advice, singularly devoted to their interests and rights,” Reif wrote. [via Business Insider via Boston Globe]