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New Jersey’s Attorney General settles the Bitcoin and E-Sports Entertainment case

John Hoffman, acting New Jersey Attorney General, has announced that online gaming company E-Sports Entertainment has agreed to pay a $1 million (€740,741) settlement as the result of a course case relating to electronic currency Bitcoin.

The company charges $6.95 per month to play games such as Counter Strike and Team Fortress 2 either alone or against other players on a platform it claims does not allow cheating.

To access the platform, players must download E-Sports software, which has administrative access to the computer.

Authorities claim that code was installed on the software allowing for Bitcoins to be ‘mined’ without the users’ knowledge.

In a statement, E-Sports co-founder Eric Thunberg said that the company had co-operated fully with the case and would take “every possible step” to secure user privacy. The statement also confirmed the employees responsible for the issue had been sacked.

The statement also said that E-Sports disagreed with the Attorney General’s account of the matter, with the signed settlement making it clear that the firm had not admitted to any wrongdoing.

Thunberg added that the US Attorney press release “represents a deep misunderstanding of the facts of the case, the nature of our business and the technology in question”.

Acting Attorney General Hoffman added: “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.”

Hoffman said that the mining took place in April and the software could only do so when users were away from their computer, as it could detect if a person was active by the movements of their mouse.

He added that software engineer Sean Hunczak had created four wallets for the mined Bitcoins, converting them into about $3,500 in real money.

Under the settlement agreement, the firm is no longer allowed to provide customers with services that are downloaded without their consent. E-Sports also set out a comprehensive privacy and data security programme.

If it complies with all the terms, the firm will only be made to pay $325,000 of the $1 million settlement.

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