Tidbit Taken to Task in Settlement with NJ Agency

After a lengthy rendezvous with the New Jersey Division of Consumer Affairs, the creators of Tidbit have acceded to its demands.

Tidbit was a project led by MIT student Jeremy Rubin that gave websites the ability to use their visitor’s computing power to mine bitcoin, in the place of revenue generated from advertisements. Websites would supply Tidbit with their e-mail, Bitcoin address and password, and then theoretically start earning bitcoin.

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In December 2013, Rubin received a subpoena from the Division demanding the immediate submission of all its source code, wallets associated with Tidbit, and names and IP addresses of everyone mining bitcoins with Tidbit. It was not immediately clear if the software had in fact been deployed or if it was merely a prototype.

Tidbit enlisted the legal help of the Electronic Frontier Foundation (EFF), a nonprofit technology law organization, which staunchly supported their client in the name of encouraging innovation. It argued that the project, which has since disbanded, didn’t make any money and was run by “bunch of college kids”. Even MIT President L. Rafael Reif weighed in, expressing his and the university’s full backing of the project. The case reportedly went to court last September.

The Division has now issued a release saying that the case has been settled, with Rubin apparently cooperating with its demands. He supplied a list of New Jersey-based websites that used the code. The Division said that, “despite initial assertions by Tidbit’s developer,” its investigations have concluded that the software did in fact gain access to computers of persons in New Jersey without their consent. In addition, the software was supplied to developers without reviewing their privacy policies.

The settlement stipulated that Tidbit will no longer attempt to gain access to consumer computers without their consent. The order is enforced by a $25,000 penalty that has been suspended and will be vacated in two years provided that terms of the order are kept.

The Division did acknowledge that it does “not believe Tidbit was created for the purpose of invading privacy,” and that it does not want to stifle innovation.

EFF senior staff attorney Hanni Fakhoury, however, continues to defend its client, telling CoinDesk that the students have not admitted to any wrongdoing. He also charged that the outcome sends a message “that will chill people from engaging in research and innovative projects.” In addition, the case put a strain on the relationships of those involved and discouraged venture investment, he alleged.