21 Nov 2013

Gaming Company pays $1 Million for Bitcoin Hijacking

The E-Sports Entertainment Association (ESEA) agreed to pay a $1 million fine to the state of New Jersey for illegally updating its software with Bitcoin-mining code, announced the office of New Jersey’s Attorney General.

In April 2013, approximately 14,000 personal computers were secretly used to generate Bitcoins worth $3,700 at the exchange rate at the time.

“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,” John J. Hoffman, New Jersey's Acting Attorney General, said in a press release.

E-Sports must pay the State of New Jersey $325,000 of its $1 million settlement obligation on condition it restrain itself from hijacking actions in the next decade.

The company blamed an employee for the incident:  “What transpired the past two weeks is a case of an employee acting on his own and without authorization to access our community through our company’s resources,” ESEA co-founder Craig Levine told Wired.com shortly after the breach.

 “We want to make it clear to our community that we do not agree with the Attorney General's account of the Bitcoin incident,” E-Sports said in a recent statement.“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.”

To protect consumer information confidentiality, E-Sports is also obliged to update its website with a new privacy policy section and to undergo regular testing or monitoring of its security controls.

E-Sports was established in 2006 and is based in Commack, NY. The company’s customers play E-Sports-supported games against other subscribers on the company’s hosted, anti-cheat game servers.