Microsoft sues mystery hackers and virtual gaming currency touts

News by Max Metzger

Microsoft is taking a shadowy company to court over hacking Microsoft user accounts to fraudulently buy in-game currency to sell on.

Microsoft is taking a mysterious Chinese gaming company to court for, the tech giant alleges, hacking into Xbox servers and stealing cryptocurrency.

In a civil suit filed in a California court, Microsoft has accused online vendor iGSKY of having, according to court documents, unlawfully acquired Microsoft account credentials and bought virtual gaming currency with the credit cards linked to those accounts.

The China-based iGSKY sells virtual currency typically used in vast online role playing and mobile games. The website bills itself as a “world leading MMORPG service company”, which provides professional game currency, among other things, for a variety of popular games including Pokemon Go, FIFA 16 and Grand Theft Auto V.

Microsoft discovered iGSKY late last year selling currency which is only available on the Xbox platform. Upon further investigation, it was discovered that iGSKY's parent company, Gameest International Network Sales, Co. Ltd, had used credentials from previous massive breaches to access Microsoft user accounts and buy virtual Microsoft currency. A Microsoft investigation found nearly $US 2 million (£1.55 million) in fraudulent transactions.

The court documents allege that iGSKY doesn't just sell the stolen currency but also access to the compromised accounts while “reaping millions of dollars in illicit profits from their illegal enterprise”.

The identity of the defendants, whoever is behind iGSKY and Gameest International, is currently unknown but they are believed to be Chinese nationals and a judge has already frozen the company's PayPal accounts.

The compromised accounts only represent a small fraction of what could have been. According to Microsoft, the company's anti-fraud systems detected tens of thousands of attempts by the defendants to gain unauthorised access to Microsoft accounts.

The online gaming environment has emerged as an immensely profitable industry, in no small part due to the virtual currencies players regularly spend money on. A shadow market has also grown up around it, selling

“These are huge popular industries, especially in Massive Multiplayer Online Role Playing Games (MMORPG). You see a lot of Chinese bots in games like World of Warcraft  (and) you see a lot of these currency for sale in industries parallel to China”, Chris Boyd, lead malware intelligence analyst at Malwarebytes told SC Media UK.

The industry that has grown up around online gaming has not just produced a sizeable secondary market but sweatshops, where cheaply-hired workers spend hours farming virtual currency and levelling up players who are tired of the grind involved in these games.

The overall worth of the virtual currency market, “would be a difficult one to pin down. A lot of the companies that trade in virtual currency are never going to tell you how much they make in virtual coins”, adds Boyd. “The overall revenue for games world wide is in the billions so there's a huge market there for it.”

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