Employee Sentenced For Mining Bitcoin On Federal Server


Nicholas Berthaume, former communications analyst for the Federal Reserve’s Board of Governors was recently charged and sentenced for mining Bitcoin on federal systems. Bitcoin mining is a computer’s process of securing and processing transactions on the Bitcoin blockchain in exchange for a small reward.

Berthaume installed unauthorized mining software on many federal computers to earn Bitcoin, and also modified security protections on the servers to allow to access them from home. The software ran for over two years, from March 2012 through June 2014. It is unsure how much he was able to mine over the period, but with the difficulty so low in 2012, he likely mined an amount of Bitcoin valued at much much more than the fine imposed.

The defendant originally denied the allegations and attempted to cover his tracks by remotely deleting the mining software. However, the Office of Inspector General and the Federal Reserve’s National Incident Response Team’s investigation found evidence of intrusion.

The evidence by the investigative departments ultimately gave him no choice but a guilty plea. His plea likely secured him a reduced sentence of a $5000 fine, and 12 months probation for “unauthorized use of government property for unlawful purposes.” Berthaume was lucky in this case, as the charge would normally warrant a fine of $100,000 and 1 year in prison.

Tome Verbic