Former Employee Sentenced for Cryptocurrency Mining
A former employee of Digital River, an e-commerce firm, has been sentenced to three years of probation after pleading guilty to illicitly using the company’s cloud infrastructure to mine cryptocurrency. Joshua Paul Armbrust, 45, accessed Digital River’s Amazon Web Services (AWS) account without permission following his resignation in February 2020, a fact confirmed by the U.S. Attorney’s Office in Minnesota.
Unauthorized Mining Activities
The unauthorized activity occurred between December 2020 and May 2021, during which Armbrust ran a program to mine the cryptocurrency Ethereum, reportedly generating over $5,800 worth of the digital asset. This mining operation led to approximately $45,270 in cloud service costs for Digital River before it was uncovered.
Legal Proceedings and Sentencing
U.S. District Judge Jerry Blackwell issued the sentence after Armbrust admitted to a felony count of computer fraud earlier this year. His defense attorney, William J. Mauzy, emphasized that Armbrust’s actions stemmed from extreme personal difficulties, including financial strain while caring for his terminally ill mother. Mauzy described Armbrust not as a malicious hacker but as a desperate individual who took full responsibility for his actions, stating that he made no effort to hide what he was doing.
The Department of Justice highlighted that the case underscores the seriousness of “cryptojacking,” a crime where individuals unlawfully leverage another’s computing resources to mine cryptocurrencies.
Impact of Mining Activities
Armbrust’s mining occurred during a critical period, as Ethereum operated on a proof-of-work model, which requires extensive computational power and energy, prior to its shift to a proof-of-stake system in September 2022.
The investigation revealed that Armbrust’s crypto mining activities were ongoing during the night, typically from 6 p.m. to 7 a.m., with the mined Ethereum being transferred to his personal wallet. The prosecution maintained that this was not merely a lapse in judgment but rather a calculated misuse of the company’s resources that resulted in significant financial repercussions and operational challenges.
Company’s Financial Struggles
Additionally, this incident comes at a tumultuous time for Digital River, which recently filed for insolvency for its subsidiaries in Germany and ceased operations at its Minnesota headquarters. The company is in the process of winding down its services after experiencing substantial financial difficulties.
