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5 Surprising Instances of Unauthorized Cryptocurrency Mining

5 Surprising Instances of Unauthorized Cryptocurrency Mining 101
Source: iStock/Viktorcvetkovic

Due to the substantial price rally in crypto assets in 2017, cryptocurrency mining experienced a new boom with more individuals as well as businesses jumping on the crypto mining bandwagon in the hope to profit from this new alternative way of making money in the digital world.

Mining refers to the process through which new units of a digital currency come into circulation. While the algorithm varies from cryptocurrency to cryptocurrency, what is standard across all minable tokens is that miners have an economic incentive to participate in the activity.

Moreover, mining profitability is directly proportional to computational power. Miners are, therefore, incentivized to generate the most computational power possible. This, in turn, has led to some surprising instances of unauthorized cryptocurrency mining across the globe.

ESEA Gaming Network Staffer

In September 2013, an employee at the E-Sports Entertainment Association (ESEA) was fired because he altered the code in a software used by its consumers and turned it into a program that would mine bitcoin without the knowledge of the users.

The software affected was a tool that devoted gamers would use while gaming in anti-cheating modes. The employee essentially turned the tool into a bitcoin mining trojan malware. ESEA initially explained it had considered adding the code but had eventually decided against the idea. The employee, however, went against the company and decide to include the code for his own profit.

Using the collective power of the over 14,000 computers, as well as GPUs, accessing the code, the unnamed employee was able to mine 30 BTC. While the culprit was able to garner an impressive amount by today's standards, many of ESEA’s customers experienced damaged graphics cards as well as a spike in electricity bills.

According to Wired, in response to a class action lawsuit filed against the gaming company, ESEA co-founder Craig Levine stated: “The person responsible for releasing the unauthorized Bitcoin mining code has been terminated. <...> (We also have) a very reasonable claims process for people to submit verified damages to (graphics cards, power bills, etc.) and have reimbursed qualified individuals in a very fair fashion.”

The Harvard student

In February 2014, a Harvard student was caught using the university’s supercomputer to mine Dogecoin. The student had access to use the powerful machine in a research capacity but instead decided to mine the alternative digital currency.

The Harvard supercomputing cluster is called Odyssey. It is a large structure that takes up over 10,000 square feet as it is composed of three data centers each with 190 racks. Its processors are composed of a mixture of 14,000 core Intel Xeon architecture as well as AMD processors. Additionally, it has 1,000,000 NVIDIA GPU cores to further increase its computational power.

While he declined to give the details of the culprit, the Assistant Dean for Research Computing James A. Cuff stated that the person had received a permanent ban from all research resources owned by the university.

Russian Nuclear Scientists

On February 9, 2018, scientists at a Russian nuclear center were arrested for the offense of using resources at the center to mine cryptocurrencies. The scientists worked as engineers at the Russian Research Institute of Experimental Physics, which is stationed in the city of Sarov, in the Nizhny Novgorod region.

Confirming the arrests, Tatyana Zalesskaya, head of the research institute press service, said to Interfax: "Indeed, there was an attempt to unauthorized use of office computing capacities for personal purposes, including for so-called mining." The culprits will have criminal cases brought up against them by the authorities.

The engineers took advantage of the fact that there is a supercomputer housed within the nuclear facility, proceeding to utilize the machine’s superior processing ability to maximize mining rewards for themselves. The supercomputer was added to the resources of the facility in 2011 and is reported to have a computing speed measured at one petaflop. This refers to a unit of computing speed which is equal to one quadrillion floating-point operations per second.

Zalesskaya did not give further details as to how many days the supercomputers processing power was diverted to mine cryptocurrencies, neither the specific digital currency involved nor the number of people involved in the act. She did say that it was not the first time such an incident had occurred in the country. "Similar attempts have recently been registered in a number of large companies with large computing capacities, which will be severely suppressed at our enterprises,” she added.

Kazakhstan Finance Ministry

Employees of the Ministry of Finance in Kazakhstan have been suspected of downloading mining programs on devices in an attempt to garner profit through the large network of computers contained within the ministry. The findings were announced by press service of the National Security Committee (NSC). The press service explained that the culprits were determined to be members of the State Revenue Committee.

The employees downloaded the mining programs onto a large number of computers and servers by bypassing the antivirus programs installed. The press service stated: "In the mining, the information servers of the departments themselves, their regional divisions, as well as the most productive office computers of the employees were involved in the crypto(mining)."

This diversion of computational power led to a marked decrease in speed and output from the machines which eventually led to the uncovering of the scheme. The culprits are to be charged with the violation of private telecommunications networks as well as with the distribution of malicious computer programs and software products.

Bureau of Meteorology in Australia

On February 28, 2018, the Australian Federal Police raided the Melbourne offices of the Bureau of Meteorology in an attempt to determine whether there were any employees involved in any unauthorized cryptocurrency mining activities. The department is home to a number of powerful computers that it uses in the process of climate and weather forecasting.

After interviewing two suspected perpetrators, one employee was sent on leave in connection with the incident. It is currently unclear whether the state will open any criminal charges against the suspect as the investigation is still ongoing.

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