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Ex-Fed Employee Fined: Installed Bitcoin Software on Fed Server
Nicholas Berthaume, a former Federal Reserve employee, was sentenced to 12 months’ probation and fined $5,000 for installing unauthorized bitcoin software on a Fed server.
According to the Fed’s inspector general, Berthaume - who worked as a network systems communications analyst at the Fed board in Washington - installed the software so he could connect to an online bitcoin network to earn bitcoins. The software was in place from about March 2012 to June 2014.
He was subsequently fired and struck a deal in October to plead guilty to one misdemeanor charge of unlawful use of government property, a charge that carried a fine of up to $100,000 and a year in jail. He received his sentence Friday.
SPECIFICS CITED BY THE IG. Users earn bitcoins by allowing their systems’ computing power to be part of the network that processes and verifies bitcoin transactions. It wasn’t clear how many bitcoins Mr. Berthaume was able to earn by connecting the Fed’s servers to the network. Berthaume also modified certain security safeguards so he could access the server from his home. When investigators from the IG’s office confronted him about the software, he denied any knowledge of it, then later remotely deleted it.
The incident didn’t result in a loss of Fed information, but the central bank has implemented “security enhancements” because of the case.
