A complaint filed by Microsoft in federal court earlier today accuses Chinese gaming website iGSKY of hacking Xbox accounts and using stolen credit card information to purchase rare items (via The Verge). According to Microsoft, iGSKY then sells puts those items up for sale to anyone who wants them. Consumers who make purchases are unwittingly providing the website with a convenient method of laundering its stolen money.
"Microsoft is committed to providing customers with safe and secure online experiences," a Microsoft representative said in a statement to The Verge. "We filed these lawsuits to protect our Xbox customers from the illegal trafficking of stolen property."
Microsoft's probe into iGSKY's legitimacy began last December, when in-house fraud investigators purchased over 11,000 FIFA points for $60. After the purchase went through, the Xbox Live team received notice that the login information for an eight-year-old account had been changed. That account went on to purchase the 11,000 FIFA points for $127.54.
The company is unsure how iGSKY was able to access the old account. Microsoft asserts that their test did not indicate a much larger crack in the security of Xbox Live.
Microsoft's investigators then received a notification informing them that the points were available, and to spend them as soon as possible. Soon thereafter, the owner of the account contacted Xbox support to complain that he had been locked out of the account and that unauthorized transactions had gone through.
Microsoft submitted that evidence to build its charge of racketeering conspiracy, fraud, and CFAA violations against iGSKY parent company Gameest and Weiwei Chu, believed to be its operator. The judge on the case granted a temporary restraining order on Gameest, freezing its domestic assets along with any associated PayPal accounts.
According to The Verge, more arguments will be heard next week. You can read Microsoft's "Virtual Currency" suit here.