South Korean Government Institute Director Charged for Illegal Crypto Mining at Work

• A director from the Korea Food Research Institute has been accused of running an illegal crypto-mining server at work.
• They set up the operation by stealing GPUs from the institute. Plus, many other expenses were paid from the organization's budget.
• According to the NST's audit committee, the individual cost approximately 7.86 million won ($5,866) worth of damages.

A director from the Korea Food Research Institute (a government-affiliated institution) has been charged for illegally operating a crypto mining server at work.

The accused's identity has not been disclosed yet, but he was caught red-handed by the National Research Council of Science and Technology (NST) during an audit.

According to the council's investigation, the damages caused by this illegal crypto mining might be worth well over 7.86 million won ($5,866). However, what cryptocurrency was being mined is yet to be known.

What Else Do We Know about This Illegal Operation?

There isn't much information out there, but the NST did reveal the way this operation was set up. For starters, the accused stole 12 GPUs from the firm and used them to create a server for cryptocurrency mining.

It wasn't just the GPUs he stole, as he also bought a lot of other mining equipment, such as air conditioning units and some electrical facilities, from the research institute's budget. The list of accusations doesn't end here, though.

The director also forged private documents, meddled with the attendance register, stole the credentials of another employee, and used their account to buy another dedicated cryptomining GPU.

Once everything was in place, he set up a separate mining space in a warehouse within the agency's public relations office. Because no employee has been allowed to go there since the coronavirus pandemic, the operation went undetected for far too long.

This doesn't mean the operation started during the pandemic, though. According to the NST, the accused started putting together the mining server in April 2022 and operated it until it was discovered in September 2023.

The institute only realized that something was wrong when it conducted an inventory check and found that many of its GPUs were missing.

Once it became clear that something was out of sorts, the institute conducted another round of checks that revealed that an unauthorized network was connected to its system.

How Did They Manage to Run the Server?

It's no secret that many South Korean government affiliate firms do not allow access to crypto mining and crypto wallet-related websites and software - and the same is true for the Korea Food Research Institute as well.

This begs the question: how did the accused manage to run an operation of such scale for so long? Well, they used a VPN to bypass the organization's firewall.

VPNs, or virtual private networks, work by spoofing the IP address and encrypting the online traffic, thereby allowing users to stay anonymous online and sidestep any restrictions on their network (which is what happened in this case).

It's also important to discuss the legality of VPNs here. The best VPNs are essential online security tools, which is also why they're completely legal in the majority of countries around the world.

However, even in regions where using a VPN is not against the law, using it for illegal activities - such as nefariously mining cryptocurrency at work - is undoubtedly a crime and can invite legal action.What Happens Now?

The NST has handed over the case to local police. Meanwhile, the institute has been recommended to:

• Recover the damages
• Dismiss the director
• Re-examine the status of its network operations
• Take steps to strengthen its security

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