Police in China have shut down a massive cryptomining exploit pervaded by a computer network maintenance company in the Northeastern city of Zhengzhou, CCTV News reports.
Officially, the company offered network maintenance services and “value-added advertising,” to Internet cafes and other businesses. Unofficially, the company’s 9000 technicians also earned commissions by installing malicious cryptomining software on the private networks the came in contact with.
Cryptomining is an energy-consumptive venture whereby computer processors work round the clock settling transactions and trying to guess random numbers set by the network.
Guessing the random number results in the winning of a “block reward” of x number of Bitcoins or Monero.
The more computers a party can direct at the guessing, the higher that party’s chances of winning the block reward. Fees are also collected for processing transactions on the network.
Cryptomining consumes extreme amounts of electricity, however, and runs down processors. All these costs are borne by owners of the hijacked networks while proceeds of the mining are sent to the parties behind the scam.
A majority of malicious cryptomining around the globe involves the so-called “privacy coin” Monero.
In this case, the owner of the fraudulent maintenance company, and an individual called Zhang, was a graduate of computer science who may have developed the malicious cryptomining program himself.
Police believe the scheme generated over 100 million yuan ($14 million USD) in cryptocurrency proceeds, which were later converted by Zhang to Chinese yuan at an unnamed cryptocurrency trading platform.
Officer Xiaowen, head of the Netan Brigade of the Shigu Branch of the Public Security Bureau of Hengyang City called the scheme, “a high-tech scorpion…(whereby) Many Internet cafe owners…found that their Internet cafes are illegally controlled.”
Following an investigation involving ‘data analysis,’ police reportedly conducted a spectacular raid on the company’s Shenzhen headquarters:
“After determining the…tactics and personnel composition of the criminal gang, in July 2019, the task force dispatched more than 200 police officers to Zhengzhou, destroyed the network company in Zhengzhou, arrested 15 suspects, and seized computers, mobile phones, bank cards, etc., (and) froze more than 20 million yuan in cash.”
Some employees were reportedly caught “red-handed” presiding over the scam:
“(Police) found that their customer service personnel were still in contact with the nationwide network.”
