What does it take for few entrepreneurs and developers to learn? “Learn from others’ failures” is one of the common phrases in start-up circles, but still some people like Ryan Ramminger never learn. Ryan, creator of a mobile application called Prized was found to have included a malicious software code inside the application which made the customers’ smartphones mine for bitcoin. This news comes close to the recent settlement between Tidbit and the New Jersey Division of Consumer Affairs.
Tidbit started as a student hackathon project which was experimenting with bitcoin mining as an alternative for online advertising. It was found that the websites carrying Tidbit’s code tapped into the processing power of users’ computer without their permission and used it to mine bitcoin. The developers of Tidbit were fined $25,000 for their actions and prohibited them from unlawfully accessing computers in the New Jersey area for a period of two years.
Similarly Ryan has allegedly promoted his Prized mobile rewards application as a malware free mobile application which can be used to earn points by playing games and downloading affiliate applications. He had claimed that these reward points can then be redeemed for gift cards, clothes and other items. Whereas in reality, the Prized application loaded consumers’ mobile phones with malware which used the processing power and mobile data for mining virtual currencies like Dogecoin, Litecoin and Quarkcoin for the developer.
The possible violation of existing laws by Ryan was noticed by the Federal Trade Commission, which then filed a complaint alleging violations of FTC Act and New Jersey Consumer Fraud Act in the US District Court for the District of New Jersey. The defendants of this case – Ryan Ramminger and Equiliv Investments have agreed for the settlement of charges with the Federal Trade Commission and New Jersey Attorney General.
As per the terms of settlement, Ryan and Equiliv Investments are supposed to pay a penalty of $50,000 of which $44,800 is suspended upon payment of $5200 along with compliance with injunctive provisions of the order. The court has imposed a ban on creating and distributing malware. It also requires Ryan and Equiliv Investments to destroy all customer information collected through Prized application.
READ MORE: Settlement Reached! New Jersey vs Tidbit Ends in a Draw
I see, I think and I do… passionate about digital currency, start-ups and social good. I believe that if you mix them right, you can change the world. Find me @gautham_n on twitter or /gautham,nm on facebook
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