Federal Reserve Staffer Fined for Mining Bitcoins at Work

A Fed staffer has plead guilty to mining bitcoins at work.

AccessTimeIconJan 30, 2017 at 9:28 p.m. UTC
Updated Sep 11, 2021 at 1:03 p.m. UTC
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A former employee of the Federal Reserve Board of Directors has been fined $5,000 and put on probation after being caught mining bitcoins on a server owned by the US central bank.

The Fed’s Office of the Inspector General said today that Nicholas Berthaume, who previously worked as a communications analyst for the board before being fired in light of the incident, had been placed on 12 months of probation after accepting a plea deal on 27th January. He plead guilty to one count of unlawful conversion of government property, a misdemeanor.

Court documents show that Berthaume, who was indicted last October, had mined bitcoins using a Fed server for more than two years, from March 2012 to June 2014. Bitcoin mining is an energy intensive and competitive process by which new transactions are added to the blockchain.

In a statement, Fed board inspector general Mark Bialek said that his office had not been able to determine the amount of bitcoins earned. He also explained that Berthaume had sought to hide the fact that he was mining as it became apparent to Fed investigators.

Bialek noted:

“Berthaume....modified certain security safeguards so that he could remotely access the server from home. When confronted about these actions, Berthaume initially denied any knowledge of the wrongdoing. Later, however, Berthaume remotely deleted the software that he had installed in an effort to conceal his actions.”

While he did not offer any details, Bialek added that staff for the Fed board had put in place security measures to prevent similar occurrences from taking place.

Image via Shutterstock


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