$2 million crypto graphics card counterfeiting scheme busted in China
Crypto.news – Reports on July 20th reveal that several suspects have been arrested in China for allegedly selling fake used graphics cards to crypto miners.
Their modus operandi was to buy relatively new GPUs in bulk from miners, clean them, remove identifying marks, and repackage them as brand-new models.
The arrest was made after a year-long investigation by the police in Bincheng District of Binzhou City. During the operation, authorities found several mining enclosures in a warehouse missing their graphics cards.
Seven arrested in connection with $2 million graphics card counterfeiting scheme
The suspects are all Chinese nationals suspected of manufacturing and selling fake graphics cards that look like genuine products from well-known manufacturers.
The group exploited the current global chip shortage and high demand for graphics cards, which made it difficult for consumers to buy new ones. As a result, many consumers agreed to pay more than usual, unwittingly becoming victims of fraud.
In recent years, cryptocurrency prices have soared, multiplying from their peak levels in 2017. Amidst this rising demand, miners need to constantly upgrade their gear to stay competitive when connecting to proof-of-work networks like , , , and Monero.
In these networks like Classic, miners connect their graphic cards and compete to solve complex cryptographic problems for the chance to verify a block of transactions.
When successful, they receive block rewards in the network’s native currency. These coins can then be sold for cash to cover operating costs and make a profit.
While mining can be profitable, GPUs are in high demand because they can be used in other economies. This demand led to shortages and saw some individuals refurbishing gear and selling it new.
In August, Litecoin, Bitcoin’s silver, will halve its miner rewards to 6.25 LTC. Next year, there will be Bitcoin and their network rewards.
These events may affect supply and support prices in the coming days. Mining may be affected when revenues drop, as users will have to upgrade their gear to stay competitive, especially if prices rise.
This article was originally published on Crypto.news