The United States Federal Reserve is used to dealing with money, but one employee decided to work with a currency less common than the U.S. dollar. An employee of the Federal Reserve was suspended and fined for using a server at the central bank to mine for bitcoin.
Nicholas Berthaume, a former communications analyst for the Federal Reserve’s Board of Governors, used his access to the Fed’s computers to install unauthorized software that was used to earn the cryptocurrency. His activity went undetected for nearly two years, as he ran his mining operation from March 2012 through June 2014.
The software used the computing power of the server it was installed on to process, verify and record bitcoin transactions. Those who participate in the process are compensated in bitcoin. The more computational power provided by a user, the larger their share of the reward.
According to a statement issued by the Office of Inspector General (OIG), Berthaume also modified security safeguards on the Betxlarge Federal Reserve’s servers so he could remotely access the server from home.
Berthaume was reportedly confronted with allegations regarding his bitcoin mining and initially denied any wrongdoing before attempting to remotely delete the software from the server to cover his tracks.
Forensic analysis conducted by OIG agents and members of the Federal Reserve’s National Incident Response Team were able to confirm Berthaume’s meddling, which led to his termination and led to an admission of guilt.
Berthaume received 12 months probation and was fined $5,000 for his actions. It remains unclear just how much bitcoin Berthaume was able to mine over the two-year period the software he installed was running.
The investigation into his actions—which Berthaume fully cooperated in after admitting guilt—found no evidence that his actions resulted in any loss of information from the Federal Reserve. It has resulted in additional security measures being implemented to secure the bank’s servers.
As much of an oddity as Berthaume’s case may appear, he is not the first to be punished for using a government computer for bitcoin mining. In 2014, the OIG revealed a National Science Foundation (NSF) researcher had been barred from working with the U.S. government after it was discovered he used federally-funded supercomputers to mine an estimated $8,000 to $10,000 worth of the cryptocurrency.
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