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Bitcoin Government Communications Network Networking Software The Almighty Buck The Internet United States

Former Fed Employee Fined $5,000 For Installing Bitcoin Software On Server (bloomberg.com) 80

Posted by BeauHD from the rake-in-the-money dept.
An anonymous reader quotes a report from Bloomberg: A former Federal Reserve employee was sentenced Friday to 12 months probation and a $5,000 fine after pleading guilty in October to installing unauthorized software on a computer server at the U.S. central bank. Nicholas Berthaume, who as a communications analyst had access to computer servers at the Fed's Board of Governors in Washington, installed software that connected to an online bitcoin network in order to earn units of the digital currency, according to a statement Monday from the central bank's Office of Inspector General. Berthaume also "modified certain security safeguards so that he could remotely access the server from home," the statement said. When confronted, he tried to cover up his actions by deleting the software; eventually he was fired and admitted guilt, the office said. His actions didn't result in the loss of any Fed information, and the board has enhanced security since the incident, the internal watchdog said. The story was first reported by The Wall Street Journal (Warning: source may be paywalled).
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Former Fed Employee Fined $5,000 For Installing Bitcoin Software On Server More

Former Fed Employee Fined $5,000 For Installing Bitcoin Software On Server

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  • Why bother? It is not like those servers can compete with ASIC mining anyway...

    • Re:Why bother? (Score:5, Insightful)

      by rmdingler ( 1955220 ) on Monday January 30, 2017 @05:14PM (#53769365) Journal

      Why bother? It is not like those servers can compete with ASIC mining anyway...

      Curiosity: can I make it work and can I get away with it.

      Value: it's free electricity.

      Rick/reward fail: Failure to see the consequences of being caught will outweigh the likely reward.

      It is quite surprising this hasn't happened more often, unless there's an interest in keeping the discovery and dismissal in house.

      • Well with this coming out I'm sure there will be copy cats. So I would assume depending on the firm/government agency it is best to keep this under wraps even if not to give others ideas is the only reason.

      • Re: (Score:2, Informative)

        by wasteoid ( 1897370 )
        Here's your Rick [youtube.com] reward.
        • I rolled right into that.

          Nearly 280 million views... I wonder how many of those were intentional.

          • I watch it every month or so because I like the song. I think I've ever watched it unintentionally once which lead me to watch it again few more times :)

      • At this point, what would be the average time for a GPU or even a CPU to mine a bitcoin?

        • Apparently, it's a bit like the lottery [stackexchange.com] in that it only seems to make dollars if you don't have any sense.

          • Oh, so I have a good chance of making a profit then?

          • Re: (Score:3)

            by rtb61 ( 674572 )

            Not if you start it, than it is a straight up ponzi scheme. Late comers greed, creates the false sense of credibility about your imaginary pile of loot. Real problem in getting rid of your hoard a billion of dollars of fake currency is a real tough sell (kind of really, really, collapses the value of your imaginary currency). Take the US dollar, is keeps the entire US defence force to back the illusion of the made up money and the US Fed, don't want to play and they will pretty much kill you (on a country l

      • Re: (Score:3)

        by dbIII ( 701233 )

        It is quite surprising this hasn't happened more often,

        Here's one from as far back as 2011:
        https://thenextweb.com/au/2011... [thenextweb.com]
        It's probably not making the news so much because it's probably normally thought of as a petty crime.

      • Comment removed based on user account deletion

    • Re:Why bother? (Score:5, Insightful)

      by tlhIngan ( 30335 ) <slashdot&worf,net> on Monday January 30, 2017 @05:35PM (#53769511)

      Why bother? It is not like those servers can compete with ASIC mining anyway...

      That's only if you're trying to make a profit out of mining and you have expenses like real estate, electricity, the mining hardware, etc.

      If you didn't have all that overhead, CPU based mining is more than adequate, especially if you have free real estate, free electricity and free hardware. Sure you'll mine slowly, but it's all profit.

      Some ransomware does this, as do many malware - when you have a botnet of 500,000 for free use, bitcoin mining isn't terribly bad, especially since it's all free to you.

    • Meanwhile the NSA has ordered up another ~50 million or so GPU cores for their latest encryption / decryption servers...I'm not saying that they could run the BitCoin exchange if they wanted to, but they totally could.

    • Re: (Score:2)

      by dbIII ( 701233 )
      To a thief the hardware and power they can get for nothing is cheaper than an ASIC they have to buy.
      See also Bitcoin miner trojans.

  • You may not create money (Score:5, Funny)

    by Anonymous Coward on Monday January 30, 2017 @05:08PM (#53769333)

    You may not create money! What do you think this is the federal reserve bank or something?

  • Again? (Score:5, Insightful)

    by RatBastard ( 949 ) on Monday January 30, 2017 @05:24PM (#53769445) Homepage

    Reminds me of that guy who got sacked a while back for loading SETI at Home on a bunch of servers at his work.

    Is it really that hard to remember that the computers at your employer's company are not yours?

    • Well, at least he didn't do something really dire and criminal like tweet about climate change.

      • didn't do something really dire and criminal like tweet about climate change

        You mean, make official communications on behalf of a federal agency when the person in charge of that agency is in the middle of replacing - as happens regularly - the politically appointed management of that agency? Yeah, like that.

        I suppose, though, you'd have been cool with an employee of NASA making tweets from official government accounts about Putin's secret moon base where he produces pieces for his mind control ray machine. Right? No? I see. Communicating from official channels on behalf of the

    • Re: (Score:1)

      by Tablizer ( 95088 )

      Reminds me of that guy who got sacked a while back for loading SETI at Home on a bunch of servers at his work. Is it really that hard to remember that the computers at your employer's company are not yours?

      Actually they belong to Europa. Don't touch them and don't land there.

  • How ironic!....looking for MONEY(bit coin), by using the federal reserve bank computer server. Love it!

  • Sad But True (Score:5, Insightful)

    by CrashNBrn ( 1143981 ) on Monday January 30, 2017 @05:30PM (#53769477)
    Good thing we didn't live in this environment at the "dawn of networked computing" in the 80's. Most of the muds ran at the behest of unix sys-admins at Universities... under the radar of the University Dept Heads in most cases.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      There is a difference between running a mud and running a bitcoin miner eating 100% CPU/GPU all the time. There is also the hardware advancement computers have made in the past decades, CPUs and GPUs now all enter a powersaving mode when they aren't used to their full potential. The employee was practically converting additional dollars on his employers electricity bill into bitcoins in a very lossy fashion.

    • Re: (Score:2)

      by gsslay ( 807818 )
      The point is that back in the 80s there was nothing like the security concerns that exist in a modern day central bank.

  • Stupid and unprofitable (Score:3)

    by vadim_t ( 324782 ) on Monday January 30, 2017 @05:35PM (#53769509) Homepage

    I looked into it out of curiosity about a year ago and concluded that I could make somewhere around $5 - $15 a month, while spending more on power. It long stopped being worth mining with common hardware.

    Of course using someone else's equipment you don't have that downside, but those consequences far outweigh whatever pocket cash he made from it, unless it was installed on an entire cluster.

    • Re: (Score:3)

      by JustNiz ( 692889 )

      yep bitcoing mining long ceased to be viable on regular PC hardware. Anyone doing profitable mining is using dedicated ASIC-based hardware.

      Bitcoin miners are basically an arms race; Uness you're developing your own ASICs and keeping it private, its not even worth buying ASIC-based hardware anymore because by the time you get it, the "difficulty factor" (steadily increasing artificial factor designed to limit the amount of bitcoins produced) has been raised so much by other people mining with similar hardwar

  • This has to be going on at a crazy level (Score:1)

    by Anonymous Coward

    in small businesses and even medium sized enterprises where a small number of admins are gods (no regular outside audits) or security is weak to non-existent. I wouldn't be shocked if billion in electricity was being siphoned off like this illegally annually.

  • Is there anyone who would seriously buy those bullshit bitsy shekels?

    • Re: (Score:2)

      by pla ( 258480 )
      Those "bullshit bitsy shekels" have a market cap over USD$15B, which would put it at roughly the 96th largest company listed on the NASDAQ if it were a company. So I'd have to say that yeah, a whole hell of a lot of people would seriously buy those bullshit bitsy shekels.

      • Re: (Score:1)

        by amacide ( 12270 )

        Those "bullshit bitsy shekels" have a market cap over USD$15B

        Enron ~2001... Real assets valued around USD$63B.

        So I'd have to say that yeah, a whole hell of a lot of people would seriously buy those bullshit bitsy shekels.

        Well, as that old saying goes... ;-)

    • Sure. I've bought some bitcoin. Nothing more than I can afford to lose, however. $20 worth every year or two. I send fractions to folks on the internet, couple bucks at a time. I find it worth $20 every year to know that I can send random people around the world $1-$5 on a whim. I occasionally Reddit, and they've got ChangeTipBot and DodgeBot, where you can automagically send a couple bucks to someone. I've tossed out a few "bullshit bitsy shekels" for great posts and useful information.

      I'm well aw

  • Breaking Even??? (Score:2, Interesting)

    by IonOtter ( 629215 )

    Today's current exchange rate is 5.41 coins for $5000.00.

    The article doesn't say how long he had the system running. But if it had any serious processing power, and he got 1 coin per month for six months? That's breaking even.

    If he managed to do it longer than six months, then that's a profit, especially since he didn't tie up too much time in court trying to plead not guilty.

    I would say, "Not bad!", but we don't know how long he was running the software. And he's not likely to say, either.

    • well since he wasn't paying the bills to run/use the hardware its all pure profit. 1 coin would have earned him 100% pure profit.

    • If you take a longer view on the "profit" made. What's the difference in pay between a Network Communications Analyst at the Federal Reserve and a fry cook at the local hole in the wall cafe?

    • And if he has been mining since may 2010 or so, a $5000 fine is nothing. Heck, even a 5 million fine would be a joke to him.

    • Re: (Score:3)

      by crtreece ( 59298 )
      Well, you would need an internet full of datacenters running CPU miners to make 1 BTC/month. A datacenter full of GPU miners might have generated some BTC, but still not in the 1/month range. To turn 1 BTC/m, you'd need to generate around 14 TERAhash/second [99bitcoins.com] An AMD 5870 GPU can do about 4 GIGAhash/sec [bitcoin.it]and a Core i7 3930k can do about 66 MEGAhash/sec. Playing with the profit calculator from the first link shows a single gpu with no cost for hardware or electricity is going to generate about $0.07/month.

  • Let's try that again shall we?

    1) They haven't found any evidence of data being lost

    2) They lost a lot of data but prefer not to admit it....

    Absence of evidence is not evidence of absence!

  • can he pay the fine with bitcoins ?!?
  • How does this work?
    Was the employee first fined, then put on probation, then eventually fired?!
    Is the employee fired after the 12 months probation?!

    Did the (sentencing) entity change their minds on this?

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