E-Sports League Hit With Lawsuit Over Bitcoin-Mining Scandal

Three gamers have sued the ESEA League, one of the largest PC gaming leagues, for the surreptitious installation on their computers of malware that "mined" the virtual currency called bitcoins, netting a rogue ESEA employee some $US3,700 back in April. Their lawsuit seeks class action status.

The suit was filed in San Francisco on Wednesday in California state court. The plaintiffs, Kevin Gallette, Jackson Smith and Roy Han, allege that the bitcoin-mining malware required so much of their computers' processing power that it damaged their video cards. Several allegations of GPU damage were made in the ESEA League's official forums as the scandal unfolded.

Bitcoins are a virtual currency that are "mined" by resolving a very complex cryptographic equation, taking large and prolonged amounts of processing. Compiling a large network of computers, either knowing or unknowing, to divide the workload is one way of doing that more efficiently. The concept is that a computer sitting idle gives its GPU over to the mining application.

In a statement on May 1, ESEA League's parent company, E-Sports Entertainment Association, admitted to the installation of bitcoin-mining code on users' computers through the ESEA League client that handles matchmaking and other functions. ESEA accused an unnamed employee of doing so for personal gain. ESEA donated all money made from the mining, plus a matching amount, to charity, increased prize pools, asked any users who suffered hardware damage to file a support ticket, and promised to sanction the employee responsible.

ESEA League has been in existence for about 10 years, supporting games such as Counter-Strike, Team Fortress 2, and League of Legends.

ESEA said the bitcoin-mining project began as an internal experiment to see how mining worked, and whether it could become a feature that added value. This was around the time bitcoins' exchange rate soared past $US260 per 1. It's now around $US70.

Management ordered the mining experiment scrapped, the ESEA said, but an unnamed employee still inserted the code into an update for the ESEA client that all users later downloaded. From about April 13 to the end of the month, $US3,713.55 worth of bitcoins were mined by ESEA League users. ESEA said this employee did so without authorization and for personal gain.

Some users complained the malware fried their video cards, causing them to operate at extreme temperatures for prolonged times, resulting in video errors. Plaintiffs Gallette, Smith and Han all allege the same thing; Gallette and Smith say they paid $US500 for their video cards; Han said he paid $US70 for his. They paid about $US300 each to replace them. Further, the three say their electricity bills jumped an extra $US30 in the month their computers were running the bitcoin mining malware.

The three plaintiffs seek class action status for their complaint, the return, to users, of any funds made from bitcoin mining performed by their computers, compensatory damages for the cost of their ruined hardware and electric bills, legal fees and unspecified punitive damages.

The case is Kevin Gallette et al. vs. E-Sports Entertainment, llc, number CGC-13-532593.

Kotaku has reached out to Craig Levine, the co-owner of ESEA, for comment on the lawsuit and to inquire further how ESEA has handled this matter since May 1. Any reply the ESEA gives will be updated here.

To contact the author of this post, write to [email protected] or find him on Twitter @owengood.


Comments

    Sue, sue, sue.

    I could understand if the complaint was that their machines were being used to mine bitcoin, which wasn't consented to, and as a result they'd like their slice of the bitcoin pie (or equivalent dollars, and I would suspect not at the current exchange rate). All other steps seem to already be taken care of - though part of the suit could include actually naming the employee and getting their story direct, just for the sake of knowing exactly what happened.

    But suing for damaged hardware? It's the hardware's job to keep itself from burning up. The electronics industry has had temperature probes as discrete components and on-chip elements for a very long time, and throttling back, signaling the host operating system that it is about to shut itself off to prevent hardware damage, or just plain throwing a kernel panic, have been among the many mitigating options for well over a decade.
    If anything, they should be suing their respective hardware manufacturers for delivering a product that offers the capability to do X (in this case, heavy computations using shaders) but then goes and self-destroys when you actually use that capability. No, it doesn't matter that this wasn't a game, unless your warranty actually says you can only use the GPU shaders for gaming and not GPGPU applications.
    ( Warranty void, and case baseless, if they overlocked their cards (e.g. comment 1 in the forum complaints thread: "obviously my card was overvolted, but seeing as ESEA fried my card, I would really like some compensation...") or submerged them into boiling oil in the first place. )

    They would have to specifically claim that they knew their hardware couldn't handle intensive use and would in fact be damaged if it were taxed anyway, and had previously determined that the game in question stayed within their personally established safe limits and the bitcoin mining code slipped in exceeded it. Not the strongest of arguments. (Not a lawyer - obviously.)

    This won't go anywhere, given that the league already gave the offer to replace damaged hardware. It's these idiots fault that they didn't take it.

    All this suit does is give US Players a bad name.

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