Chinese police make arrests in connection with counterfeit GPU sales

Published: Jul 20th 2023, 12:49 GMT   Comments

22 people have been arrested by Chinese police for selling used graphics cards as new.

For years, the Chinese market has been plagued by the issue of counterfeit graphics cards. Criminals engage in this illicit trade by acquiring large quantities of second-hand graphics cards and reselling them as new, reaping substantial profits through deception.

The problem tends to resurface whenever the cryptomining boom ends, presenting an opportunity to acquire post-mining GPUs at a significantly reduced cost. These used graphics cards are then subjected to a thorough cleaning and rebranding process, and packaged attractively as if they were new. However, the ruse doesn’t last long, as buyers soon discover they have either received fake cards or heavily worn-out GPUs exhibiting telltale signs of extensive use.

The strain put on the cooling systems and the wear on the GPU memory become evident rather quickly. Some counterfeit GPUs even display a noticeable yellow tint on the memory. To conceal these issues, some criminal groups have gone to the extent of painting the memory chips, attempting to mask signs of prolonged usage.

Police officers at the scene, Source: Bincheng Police

Recently, the police from the Bincheng district in Binzhou city took action against one such group and conducted a raid on their warehouse. Inside, they found numerous mining enclosures that had been stripped of GPUs. These graphics cards were later cleaned and repackaged for sale as new items. The full extent of this operation remains uncertain, as it could be just one of several locations used by the criminal network.

This illicit activity involved a considerable number of people responsible for buying used GPUs, cleaning and testing them, and repackaging the goods under a different brand. Despite the appearance of refurbishment, these cards were deliberately mislabeled to deceive buyers. It is important to remember that many of these brands may even appear on US retailer websites.

As a result of the raid, the Chinese police arrested a total of 22 individuals connected to the operation. However, only seven of them were detained and faced criminal charges. The value of the counterfeit graphics cards involved in this case is estimated to have exceeded 15 million yuan (approximately 2 million US dollars).

Source: Bincheng Police via ITHome

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