Simply put
- Joshua Paul Armbrust pleaded guilty in April to computer fraud for using his previous employer’s AWS account to mine Ethereum.
- He was sentenced to three years of probation and must repay the full amount involved.
- This activity cost his former employer over $45,000 in cloud fees while he reportedly earned about $5,800 in cryptocurrency.
A former engineer at the e-commerce firm Digital River received a three-year probation sentence on Tuesday for misusing his past employer’s cloud resources to mine cryptocurrency illegally.
Armbrust, 45, was sentenced by U.S. District Judge Jerry Blackwell following his guilty plea in April regarding a computer fraud felony, as noted by the U.S. Attorney’s Office for the District of Minnesota.
After leaving Digital River in February 2020, Armbrust allegedly accessed the company’s Amazon Web Services account from December 2020 to May 2021—running a mining program without authorization.
The Justice Department stated that Armbrust “repeatedly accessed the company’s Amazon Web Services accounts without authorization and used AWS computers to mine the Ethereum cryptocurrency.”
William J. Mausey, Armbrust’s defense attorney, mentioned that his actions took place during “a period of extreme financial hardship and considerable emotional distress,” as he was caring for his ailing mother, who has since passed away.
Mausey argued that Armbrust was not a “malicious hacker,” but rather someone in “despair and desperation,” emphasizing that he didn’t try to hide his activities and accepted full responsibility for the resulting losses.
Prosecutors indicated that the mining operation yielded $5,800 worth of Ethereum, which Armbrust used personally, while Digital River faced approximately $45,270 in cloud service costs before the scheme was uncovered.
It’s interesting to consider that at the time Armbrust was mining, Ethereum operated under a proof-of-work system that was highly energy-intensive until the shift to proof of stake in September 2022.
Armbrust had previously been indicted for his involvement in this “cryptojacking” scheme, which led to significant financial losses, according to U.S. Attorney Andrew M. Lugar.
Cryptojacking, per the Department of Justice’s definition, involves unauthorized parties utilizing a victim’s hardware to mine cryptocurrencies like Bitcoin or Ethereum.
Armbrust was reportedly transferring Ethereum to his personal wallet daily, between 6 PM and 7 AM.
Prosecutors emphasized that his actions were not merely a brief lapse in judgment but rather a calculated misuse of the company’s computing resources, resulting in considerable financial disruption.
Digital River’s German subsidiary filed for bankruptcy earlier this year after losing access to critical credit, leading to the closure of its Minnesota headquarters and a halt to most global services.
The firm is winding down its operations, and attempts have been made to obtain comments from both Digital River and Armbrust’s legal team about this case.
