Gaming company hit with $1 million fine for turning customer PCs into Bitcoin miners

By on November 20, 2013, 3:00 PM
pcs, gaming, bitcoin, fine, bitcoin mining, e-sports entertainment association

A gaming company by the name of E-Sports Entertainment Association (ESEA) has been hit with a $1 million fine stemming from a Bitcoin mining incident earlier this year. The company is being forced to pay $325,000 upfront and will only be charged the remainder of the penalty if they are caught misbehaving in a similar fashion over the next decade.

ESEA is responsible for letting CounterStrike players face off in anti-cheat matches, something that’s reserved for the most competitive gamers – around 14,000 paying customers at last check. Earlier this spring, the company toyed with the idea of adding a Bitcoin mining option to the anti-cheat client but ultimately gave up on the idea. Well, all but one rogue employee.

According to ESEA, said employee went ahead and distributed the Bitcoin mining code to unsuspecting customers the very next day for his own personal gain. It’s unclear exactly how many systems may have been mining Bitcoins but given the 14,000 subscriber base, it could be up to that many systems.

This went on for roughly two weeks before the company caught wind of it. In that time, the employee generated nearly 30 Bitcoins which would be worth more than $18,000 based on current exchange rates. Given the clientele (gamers), the employee was able to generate much more than he would have on a regular system as powerful gaming machines are excellent setups for mining.

ESEA said at the time they would donate the ill-received Bitcoins to charity and match the donation out of their own pocket. The employee in question has also since been terminated.

User Comments: 14

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Guest said:

I wondered when we'd hear of something like this happening but I expected to hear that such a crime would originate from within a corporate ISP or other large corporation with a large IT infrastructure, rather than from within the entertainment/gaming industry. This also makes me wonder how many corporate sysadmins and IT support personnel (outside of entertainment) who are using corporate assets to mine bitcoins and not getting caught/detected...yet....

2 people like this | cliffordcooley cliffordcooley, TechSpot Paladin, said:

Looks to me the company came forward and did the right thing. Why are they being charged? If anything waver the whole 1 million as a deterrent through-out the 10 year probation period.

2 people like this | TheDreams TheDreams said:

I think they should have fined the employee since the company was unknowing.

fimbles fimbles said:

Being all e-sports fanatics I bet the gpu cluster was awesome

gamoniac said:

I think they should have fined the employee since the company was unknowing.

Just like other industries, companies are responsible for employees' actions when they are on the clock. For example, on the wall street, financial advisors/consultants have cost banks and financial institutes millions of dollars in SEC fines and settlements.

1 person liked this | Guest said:

Don't fine ESEA, what kind of logic is that? They have been doing good things for the competitive gaming community, and they clearly came forward to correct the wrong of a single employee. Stupid backwards system.

Guest said:

I guess the lesson is, don't be honest, or you will be fined.

Guest said:

I know of someone who works in IT for a major university that set all the computer laps up to run it in the background. Hundreds if not a couple thousand computers all running 24/7. It happens a lot more than most people think.

Emexrulsier said:

The employee in question has also since been terminated.

Bit harsh I wonder if they have their own patented T1000 ?

wiyosaya said:

The employee in question has also since been terminated.

Bit harsh I wonder if they have their own patented T1000 ?

It just cost the company at least $325K and this is a bit harsh? WTF??

Dishonest and / or covert actions to the tune of this amount should not be tolerated by any company, in my opinion.

What would you have the company do??

Guest said:

Maybe they should just terminate his employment contract,

Guest said:

Lol it's a reference to the Terminator franchise.

Guest said:

I guess the Employee worked for cheap so they did not bug him. You can bet if he earned good wages they would have watched him like a hawk (crossed with an Owl) and the chances of him stealing would have been slim or none. He would have no need, no reason, and would be a better class of person.

The number one cause of "loss" in a Company is the Owner, or the Employees they hired (if you prefer that explanation). Why do you think many places ask 'odd' questions in a Job Interview (like "What would you do if you saw another Employee stealing") -- duh ! Now there is a hint; do not work there or you will be blamed as last hired first fired.

If you invent something on company time the Company owns your Invention, and so they should take the heat for your stupidity and dishonesty. Some things must work fairly or nothing would.

Guest said:

Soooo the ppl who spend electricity and have wear and tear on their systems,they get nothing from this,charity gets it all??? Are you people fking retarded,REPAY THE VICTIMS

it's ok to give ill gotten money 2 charity? so I can use this whitewash drug money.? thats ok right,aslong as it goes too charity doesnt matter who I stole it from right,**** those guy's pcs and electricity bill,give it too charity ,thatll make up for this.... fking ******,should be lined up and shot

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