Crypto
Former Northland man sentenced for ‘cryptojacking’ scheme
ST. PAUL — A former Northland resident will repay more than $45,000 to his former employer for misusing their computer systems to mine cryptocurrency for personal gain.
Joshua Paul Armbrust, 45, was sentenced Tuesday by U.S. District Judge Jerry Blackwell to three years of probation following his
April guilty plea to a felony count of computer fraud.
Armbrust, according to court documents, continued to use the resources of Digital River, a Minnetonka-based global e-commerce and payment processing company, for more than a year after he resigned in February 2020.
Through the scheme known as “cryptojacking,” he took advantage of the now-defunct company’s computing power to obtain and liquidate $5,895 worth of Ethereum — while forcing Digital River to absorb $45,270 worth of web service fees.
“The defendant’s conduct strikes at the core of digital trust and security in the modern economy,” Assistant U.S. Attorney Bradley Endicott told the court. “Companies rely on former employees to act ethically, even after separation, and to respect corporate systems and data.
“Unauthorized access to corporate cloud infrastructure not only creates financial harm, as in this case, but also exposes sensitive systems to potential compromise and opens the door to more severe cyber threats.”
Armbrust was
living in Orr when he was indicted by a federal grand jury last November.
Records indicate he has since relocated to St. Paul and is working for an insurance company.
Endicott said the scheme came to light only because Digital River, which went out of business in January, conducted an internal investigation and discovered the unauthorized activity, which was then traced back to Armbrust’s IP address.
Defense attorney William Mauzy told the court Armbrust had been given a code to access Amazon Web Services, which hosted programs that Digital River was using to mine cryptocurrency.
After leaving the job, the defendant used that same code to build a program to generate cryptocurrency for himself — leveraging the services between 6 p.m. and 7 a.m. daily, and then transferring the Ethereum into a digital wallet he controlled.
Endicott said it was “not a momentary lapse in judgment” but a “calculated and covert misuse of enterprise-level computing resources for private enrichment.” It “resulted in real monetary losses, investigative costs and operational disruption to a private company.”
“The defendant is clearly a capable and technically skilled individual,” the prosecutor said. “But instead of using those talents for constructive and lawful purposes, he chose to exploit his former employer for personal gain. It is disappointing that someone with this ability used his skills to steal.”
Mauzy, though, noted the scheme occurred “during a time of extreme financial need and considerable emotional distress,” as Armbrust was caring for his mother, who was in deteriorating health and has since died.
The attorney said the evidence clearly shows his client was not a “malicious hacker” who set out to disable his former employer’s computer systems. He made no efforts to cover his tracks and has accepted responsibility for the financial losses.
“Armbrust’s conduct, while criminal, was an act of desperation and despair,” Mauzy wrote, “not a crime of greed.”
The probationary term was expected, as both sides jointly recommended it under the plea agreement. Armbrust has no prior criminal history.
The FBI handled the investigation.
Tom Olsen covers crime and courts and the 8th Congressional District for the Duluth News Tribune since 2013. He is a graduate of the University of Minnesota Duluth and a lifelong resident of the city. Readers can contact Olsen at 218-723-5333 or tolsen@duluthnews.com.
Key Takeaways
- Bitcoin fell below $80,000 on May 7, erasing weekly gains after hitting a high of $82,833.
- Volatility triggered $270 million in liquidations and pulled the crypto market cap to $2.74 trillion.
- Concerns mount that President Trump may pivot to a hot war as Tehran rejects the latest U.S. proposal.
The Iran Peace Deal Factor
On May 7, bitcoin reversed course, dipping below $80,000 to effectively erase gains made since Monday. As shown by the daily chart, the top cryptocurrency—which reached a multi-month high of $82,833 some 24 hours earlier—had been under pressure from bears since Wednesday afternoon.
After losing $1,000 during a slow descent from midday to midnight, bitcoin found temporary support at $80,700. While a pre-dawn rally lifted the price to $81,600, the momentum proved unsustainable. The subsequent sell-off was more aggressive, forcing the asset down to a $79,500 intraday low. As of 1 p.m. EDT, bitcoin has reclaimed some ground, currently hovering just below the $80,000 mark.
Bitcoin’s nearly 2% drop dragged its market capitalization below the $1.6 trillion mark, a marked decline from the approximately $1.66 trillion intraday peak reached on Wednesday. The drop helped pull the crypto economy’s market cap to $2.74 trillion, down from just over $2.8 trillion.
The cryptocurrency market’s retreat, which mirrored Wall Street’s, coincided with reports that Iran had rejected the Trump administration’s proposal to end the war. According to a post on X by Walter Bloomberg, a senior Iranian official, Mohsen Rezaei, said Tehran rejected the proposal—which calls on Iran to reopen the Strait of Hormuz—because it does not include reparations for war damage.
Iran’s rejection of the U.S. proposal neutralized the optimism sparked by earlier Axios reports that a deal was imminent. Concerns are mounting that a prolonged diplomatic stalemate will embolden Washington hawks, potentially sidelining proponents of diplomacy and nudging President Trump toward a direct military confrontation.
Despite the plunge, bitcoin was at the time of writing still up nearly 5% since the beginning of the month and more than 15% over a 30-day period. Meanwhile, bitcoin’s volatility over the 24-hour period saw $91 million in overleveraged long positions wiped out, compared with $12 million in shorts. Overall, the crypto economy saw nearly $270 million in long bets liquidated versus $90 million in shorts.
Bermuda is accelerating its effort to make stablecoins a part of everyday commerce, Bermuda Premier David Burt said Wednesday (May 6).
Key Takeaways:
- Babylon and Gomining announced a Trustless Bitcoin Vault (TBV) integration for up to 1,000 BTC.
- BTC holders earn Gomining mining rewards via Babylon’s vaults without bridging, wrapping, or custody loss.
- Babylon holds 56,853 BTC in staking vaults and raised $15M from a16z crypto in January 2026.
How the Integration Works
Bitcoin owners will be able to lock their BTC into Babylon’s Trustless Bitcoin Vaults (TBV), a mechanism that holds bitcoin on its native blockchain under programmatic rules, without moving it off the Bitcoin network. From there, users can programmatically borrow and self-commit those locked funds to Gomining’s mining products, earning rewards from Gomining’s industrial-scale operations in the form of native bitcoin yield.
The key distinction, per the official announcement, is that users never wrap their BTC into a synthetic token, never bridge it to another chain, and never hand custody to a third party. The bitcoin remains onchain on the network throughout, with vault rules enforced at the protocol level rather than by a centralized operator.
David Tse, co-founder of Babylon, said the integration “extends the reach and adoption of TBV within a Bitcoin-aligned ecosystem,” while Mark Zalan, CEO of Gomining, added that the partnership “extends infrastructure to Bitcoin holders who refuse to compromise on self-custody.”
The initial rollout targets up to 1,000 BTC, approximately $82 million at current prices, committed through the aforementioned vault system.
Why It Matters for Bitcoin DeFi
The persistent challenge in Bitcoin decentralized finance ( DeFi) has been generating yield on BTC without compromising the properties that make it valuable, i.e. self-custody, onchain transparency, and censorship resistance. Wrapped bitcoin solutions, such as WBTC, require trusting a centralized custodian, and cross-chain bridges have repeatedly proven to be attack vectors, accounting for billions in losses across the broader crypto industry.
Babylon has been building around this constraint since its founding. Its staking protocol already holds 56,853 BTC in staking vaults, approximately $5.64 billion at current prices, making it the largest Bitcoin staking protocol by total value locked. The firm raised $15 million from a16z crypto in January 2026 to develop Bitcoin collateral infrastructure.
-
Politics2 minutes agoNewsom pledges to move forward with Delta water tunnel in California
-
Science8 minutes agoDirty mind? Study suggests gut movement may flush excess material from our brains
-
Sports14 minutes agoKyle Loftis, street racing media pioneer who founded 1320Video, dies at 43
-
World26 minutes agoAs US and Iran weigh peace deal, stranded seafarers wait in limbo
-
News56 minutes agoU.S. military says it intercepted Iranian attacks on 3 Navy ships in Strait of Hormuz
-
New York2 hours agoCornell Is Investigating Confrontation Between President and Students
-
Detroit, MI3 hours agoDan Gilbert paid for army of Cavs fans to take over Pistons playoff game
-
San Francisco, CA3 hours agoMissing woman last seen in San Francisco found dead in Texas after 53 years