ESEA Faces Lawsuit Over Bitcoin Mining Scandal

[Steven Bogos]

ESEA Faces Lawsuit Over Bitcoin Mining Scandal

The class-action suit is seeking damages and demanding a trial by jury for the ESEA.

Earlier this month, a major scandal tarnished the ESEA's otherwise good reputation [http://www.escapistmagazine.com/news/view/123676-Rogue-Bitcoin-Code-Found-in-Competitive-Counter-Strike-Servers] when it was revealed that admins had installed Bitcoin mining malware unknowingly onto player's computers. I won't bore you with the details of Bitcoin mining (which is quite interesting, actually), but just know that they essentially made almost $4,000 by demanding a large enough amount of system resources from affected computers, that it was causing player's graphics cards to die. Some of those players apparently didn't appreciate having their cards melted and their trust violated, and have in turn served the ESEA with a class action suit, seeking damages and demanding a trial by jury.

The lawsuit has been drawn up by three claimants, Kevin Gallette, Jackson Smith and Roy Han, "on behalf of all others similarly situated" in California. The trio are citing laws including the Californian Consumer Protection Against Computer Spyware Act, Unfair Competition, Fraud, Conversion and Product Liability.

When the accusations first flew, ESEA Co-founder Eric Thunberg initially pleaded ignorance, then tried to blame the whole thing on an "April Fools" joke gone wrong before eventually singling out "an employee acting on his own and without authorization."

To his credit, Thunberg has pledged to add $3,713.55 (the total equivalent value of the Bitcoins mined during the whole fiasco) to the Season 14 prize pool, as well as donate double that amount to the American Cancer Society.

"ESEA is also in the process of taking all necessary steps internally to ensure that nothing like this ever happens again," he added, in an official response to the scandal.

Source: PC Games N [http://www.pcgamesn.com/counterstrike/esea-served-class-action-lawsuit-over-bitcoin-malware-scandal]

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[Phrozenflame500]

Hopefully this goes through. Seriously, putting malware under the guise of legit tournament? Not to mention the fact that they seem to have a PR Department almost as retarded as Micro$oft.

 

[Grabehn]

"April's Fools joke gone wrong" PLEASE someone tell me they fired the guy that came up with that excuse.

 

[SadisticFire]

To his credit, Thunberg has pledged to add $3,713.55 (the total equivalent value of the Bitcoins mined during the whole fiasco) to the Season 14 prize pool, as well as donate double that amount to the American Cancer Society

I can't help but notice that isn't a terrible thing done. It is quite a large sum to have donated to charity and to be added to the prizes. It still is terrible that they thought they would bitcoin mine, but... 6,427$ for charity is quite a handsome sum. But nyan, I suppose forgiveness once, but vigilant the next time is what I would say.

 

[mechalynx]

To his credit, Thunberg has pledged to add $3,713.55 (the total equivalent value of the Bitcoins mined during the whole fiasco) to the Season 14 prize pool, as well as donate double that amount to the American Cancer Society

I can't help but notice that isn't a terrible thing done. It is quite a large sum to have donated to charity and to be added to the prizes. It still is terrible that they thought they would bitcoin mine, but... 6,427$ for charity is quite a handsome sum. But nyan, I suppose forgiveness once, but vigilant the next time is what I would say.

I'd still be pissed and rightly so, if it were my equipment they damaged. I don't think Thunberg set aside any cash for that.

 

[SadisticFire]

I'd still be pissed and rightly so, if it were my equipment they damaged. I don't think Thunberg set aside any cash for that.

You can forgive and be pissed. But I can perfectly understand the reaction. I just feel like we shouldn't completely demonize them.

 

[sir neillios]

Good. This should be classed as an act of theft, or extortion or something similar. If laws were up to date the police should be the ones investigating this, not brought to trial by some lawsuit. We don't know if they're telling the truth at all, it could be a far larger sum for all we know.

 

[spartandude]

would someone mind explaining what bitcoin mining is? i honestly have no idea whats going on

 

[ThreeKneeNick]

Hopefully this goes through. Seriously, putting malware under the guise of legit tournament? Not to mention the fact that they seem to have a PR Department almost as retarded as Micro$oft.

I think it's not really malware, it's just software that uses as much system resources as it can to solve math stuff, which is roughly how bitcoins are mined. The bad part is that it did it for the benefit of someone else ...

 

[TheEvilCheese]

would someone mind explaining what bitcoin mining is? i honestly have no idea whats going on

Bitcoin is an attempt at a fully digital, non-central currency.

http://bitcoin.org/en/how-it-works

Bitcoins are 'mined' by an extremely intensive computing process, generally using your graphics card to run the software (it's very interesting actually, but I'm not the right person to explain it) it is used to keep the open non-centralized system functioning by having people contribute computing power. You have a chance to 'mine' a bitcoin when doing this (more processing power = more chance) and bitcoins themselves have a significant value.

The ESEA guy(s) were distributing software that forced computers to mine bitcoins and then selling the bitcoins for profit. Looks to me like they got caught red-handed and are trying to get some good reputation back. Apparently said software was not stable and caused significant hardware problems due to it's nature attempting to maximize output.

 

[Baresark]

I have to be honest here... I would very surprised if they could a.)track the failure of their video cards to this bitcoin mining program and b.)that this was actually the cause of their systems failure. I mean, anyone can mine bitcoins, and lots of people did/do (not sure what the status of this is yet, if it's still a thing or not as only recently several bitcoin operations were shut down by governmental agencies) mine bitcoins without destroying their video cards. From my understanding, it's not actually a very intensive process, or at least it doesn't have to be. It's my opinion (I can't emphasize that enough):

If they mined $4000 in bitcoins, which I believe were running for about $80 each at the time, they mined about 50 coins. It takes quite a lot of machines to have mined that many coins in the amount of time it was reported to have gone on for (though luck plays a part in it as the machine to finish a block gets the coin, not the one who has done most of the work). If only three cards were destroyed in this time, I find it hard to believe that it has anything to do with this operation. Though, the cards may have already been on the way out and this may have pushed them over the edge.

That is the end of my opinion.

The facts are that the ESEA had no right to use people's processing power without their express permission, so at very least the money should go to somewhere that could use it and the people responsible should be banned from any job that has that has the express ability to implant unknown software into people's computers. That is also of course my opinion, the punishment part I mean.

 

[funnydude6556]

ESEA Faces Lawsuit Over Bitcoin Mining Scandal


To his credit, Thunberg has pledged to add $3,713.55 (the total equivalent value of the Bitcoins mined during the whole fiasco) to the Season 14 prize pool, as well as donate double that amount to the American Cancer Society.
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Donating to charity sounds good but their answer to helping the people who's graphics cards they broke is to let them try to win the money as a prize? They couldn't give that money to the players to pay for new graphics cards to replace the ones they broke? Yeah I know their trying to make it right here but I think a lot of people are going to find it hard to trust these guys after this. I know I would.

 

[RJ 17]

Probably a stupid question, but what exactly is a Bitcoin? I read in the article that this one linked back to where the story originally came up that the code mined 29 of the things and that equated to the nearly $4K. I'm guessing they're some form of digital currency?

I guess what I'm really asking is what the article said it didn't want to bore us with: how are these things just siphoned "out of thin air" by utilizing people's graphics cards until they kerplode?

 

[RJ 17]

ESEA Faces Lawsuit Over Bitcoin Mining Scandal


To his credit, Thunberg has pledged to add $3,713.55 (the total equivalent value of the Bitcoins mined during the whole fiasco) to the Season 14 prize pool, as well as donate double that amount to the American Cancer Society.
Permalink

Donating to charity sounds good but their answer to helping the people who's graphics cards they broke is to let them try to win the money as a prize? They couldn't give that money to the players to pay for new graphics cards to replace the ones they broke?

I think that's the entire point of listing "damages" as a claim in this lawsuit. Gamers don't want a bigger prize pool at a tournament they may or may not even go to, they want their graphics cards replaced.

 

[ColaWarVeteran]

To his credit, Thunberg has pledged to add $3,713.55 (the total equivalent value of the Bitcoins mined during the whole fiasco) to the Season 14 prize pool, as well as donate double that amount to the American Cancer Society

I don't get why people think this is an acceptable answer. It always seems when some company/politician gets caught with their hand in the cookie jar they turn around and claim they will donate their ill gotten gains to charity.

From the American Cancer Society's Donation FAQ http://www.cancer.org/aboutus/howwehelpyou/onlinehelp/donation-faq

Are donations made to The American Cancer Society tax- deductible?

Yes, monetary donations to the Society are tax-deductible (including donations to events like Relay or Strides); however, certain donations in which the donor receives a good or service in return for a donation are not tax-deductible or may be only partially deductible. This would apply to Society programs such as Daffodil Days, Golf Pass programs & Discovery Shop purchases.

So they donate the money to a charity to make everyone see how good they really are then just write it off on their taxes and get the money back. Now I understand that the ACS benefits from this and that's a good thing but when these guys act like this should solve the problem when they will just get the money back in their taxes I can't help but feel they're cheating the system again.

 

[MeChaNiZ3D]

It probably would have been too technically difficult to reimburse individually people whose grpahics cards met their fate over this. But then again, I'd be annoyed if it was my graphics card. Honestly, allowing this level of unauthorised activity is negligent, and they do pretty much deserve a lawsuit.

 

[AngelOfBlueRoses]

I'd still be pissed and rightly so, if it were my equipment they damaged. I don't think Thunberg set aside any cash for that.

You can forgive and be pissed. But I can perfectly understand the reaction. I just feel like we shouldn't completely demonize them.

They should be demonized no more than they deserve, but they still deserve to be so and they definitely ought not to be forgiven until they man up and replace the graphics cards that have been fried by their mining malware.

You don't commit a crime and then get off just because you donate money to cancer. You should be giving money to the victims of your crime first and foremost.

 

[Steve the Pocket]

I don't get why people think this is an acceptable answer. It always seems when some company/politician gets caught with their hand in the cookie jar they turn around and claim they will donate their ill gotten gains to charity.

So they donate the money to a charity to make everyone see how good they really are then just write it off on their taxes and get the money back. Now I understand that the ACS benefits from this and that's a good thing but when these guys act like this should solve the problem when they will just get the money back in their taxes I can't help but feel they're cheating the system again.

That's not how tax deductibility works. They don't literally get the whole amount they donated taken off the tax they have to pay. You have it deducted from how much you can claim you earned during the year. So it's like you never made that money in the first place. The idea being that you should only be taxed on the money you make and "keep". The difference in actual taxes paid is much, much less than the amount you're donating. I know that rich people (and charities!) tend to talk about tax deductions like they're free money, but they're really not anything of the sort.

 

[Amir Kondori]

I'd still be pissed and rightly so, if it were my equipment they damaged. I don't think Thunberg set aside any cash for that.

You can forgive and be pissed. But I can perfectly understand the reaction. I just feel like we shouldn't completely demonize them.

They ran code on someone's machine without authorization! That is worse than anything Aaron Swartz did and he was threatened with felony convictions and years of jail time.

There actions were criminal and they need to pay.