Chinese authorities have apprehended 22 individuals connected to the illicit sale of counterfeit GPUs through online platforms. Following a year-long investigation, this operation unfolded in Binzhou City, situated in the Bincheng district of China. The police raided a warehouse belonging to a suspected gang, believed to have been acquiring used GPUs from crypto mining setups, refurbishing them, and presenting them as new products for sale.
The counterfeit ring involved multiple teams, each with distinct responsibilities. One team was tasked with acquiring GPUs, while another performed the crucial functions of cleaning and testing them. Additionally, a separate group handled the packaging and labeling to create the illusion of brand-new GPUs. Naturally, there was also a team specifically dedicated to distributing and selling these counterfeit items.
The aftermath of the crypto mining slowdown has resulted in a flooded second-hand market for GPUs, particularly in China. Many of these GPUs have suffered significant wear and tear from constant round-the-clock mining, severely impairing their performance and diminishing their resale worth. Unfortunately, victims of this scam were often unaware that the GPUs they purchased as new, at full price, were worth only a fraction of what they had paid. To add to the deception, some scammers even resorted to repainting the GPUs to deceive customers further.
Out of the 22 arrests made, only seven individuals face criminal charges. The police estimate that the counterfeit GPUs’ total value in this case exceeds $2 million USD. Given the circumstances, caution is advised when purchasing graphic cards from third-party retailers, as there is a possibility that some counterfeit GPUs may have found their way into US stores.