🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

$2 million crypto graphics card counterfeit scheme busted in China

Published 07/23/2023, 06:01 AM
Updated 07/23/2023, 06:30 AM
$2 million crypto graphics card counterfeit scheme busted in China
BCH/USD
-
LTC/USD
-
ETC/USD
-
BTC/USD
-
ETH/USD
-

Crypto.news - Several suspects have been apprehended in China for selling used graphics cards as new to crypto miners in a counterfeit operation, reports on July 20 reveal.

Their modus operandi involved purchasing relatively new GPUs in bulk from miners, cleaning them, removing identifying marks, and repackaging them to appear as brand-new models.

The arrest came after a year-long investigation by police in the Bincheng district of Binzhou City. During the operation, authorities discovered numerous mining enclosures missing their graphics cards in a warehouse.

Seven people have been arrested in connection with the $2 million graphics card counterfeit scheme.

The suspects, all Chinese nationals, are accused of producing and selling counterfeit graphics cards that look like genuine products from well-known manufacturers.

The group exploited the current global chip shortage and the resulting high demand for graphics cards, which made it difficult for consumers to purchase new ones. Consequently, many customers agreed to pay more than usual, unknowingly becoming victims of the scam.

In recent years, cryptocurrency prices have skyrocketed, rising by multiples from 2017 peak levels. Amid this skyrocketing demand, miners constantly need to upgrade their gear to stay competitive when connected to proof-of-work networks like Bitcoin, Litecoin, Ethereum Classic, and Monero.

In these networks like Ethereum Classic, miners connect their graphic cards and compete to solve complex cryptographic problems for a chance to verify a block of transactions.

When successful, they receive block rewards in the network’s native currency. These coins can later be sold for cash to cater to operational expenses and to realize profits.

While mining can be lucrative, GPUs are in high demand considering they can be used in other economies. This demand has led to scarcity, a reason that has seen some individuals refurbish gear and sell them as new.

In August, Litecoin, which is Bitcoin’s silver, will halve its miner rewards to 6.25 LTC. Next year, Bitcoin and Bitcoin Cash will also have their network rewards.

These events will impact supply and may likely support prices in the days ahead. With reduced revenue, mining might be affected as users will have to upgrade their gear to stay competitive especially if prices rise.

This article was originally published on Crypto.news

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.