Seagate Hard Drive Fraud: Evidence Points to Chinese Origins

Recent reports indicate a troubling trend regarding Seagate hard drives, as nearly 200 customers have reported unexpectedly high operational hours on their newly purchased devices. This issue has garnered attention not only within Germany but also across various countries, including Switzerland, Austria, Luxembourg, the UK, the Czech Republic, and the USA.

Numerous online retailers have inadvertently shipped these hard drives, which had previously been used extensively. The fraudulent activity appears to involve resetting the SMART (Self-Monitoring, Analysis, and Reporting Technology) values on these second-hand drives, allowing them to be reintroduced into the market. Alarmingly, even authorized Seagate dealers have found themselves implicated in this situation.

In addition to the SMART values, Seagate's server hard drives maintain another form of tracking known as FARM (Field Accessible Reliability Metrics) values. Currently, these FARM values cannot be altered by the fraudsters, providing a more accurate record of the drives' actual usage. Reports suggest that, on average, the affected drives have been operational for approximately 25,000 hours.

Among the various claims, one particularly concerning aspect is the potential source of these drives. It has been speculated that they may originate from disused cryptocurrency mining operations in China, specifically from farms that mined Chia coins. As the profitability of this mining has declined due to soaring energy costs, many such drives have reportedly become available.

The situation has led to a noticeable decrease in available storage within the Chia network, dropping from around 34 exabytes to approximately 19 exabytes since the summer of 2024. This significant reduction translates to about one million 16TB hard drives being retired, and while not all of these drives are manufactured by Seagate, the company does hold a significant market share of over 40%.

Further complicating matters, there are reports from affected users indicating that their drives were initially sold to a Chinese company based in Mongolia. Seagate's German representatives have been reticent to comment on the origins of these drives, citing data protection regulations, but they maintain that the company is not complicit in this fraudulent scheme.

Another critical issue is the warranty status of these hard drives. Many of the affected units have either a minimal remaining warranty or none at all, particularly those sold as OEM (Original Equipment Manufacturer) units. Such drives are typically sold as part of larger systems, and as a result, they often lack direct manufacturer warranty coverage. Customers are advised to check the warranty status upon receipt of any hard drive, as this can help identify potential issues before they escalate.

In light of these revelations, consumers are encouraged to remain vigilant when purchasing hard drives. It is advisable to verify the warranty with the manufacturer using the serial number, which is often included on the purchase receipt or can be found on the packaging. If the production date appears to be outdated, returning the product may be a prudent decision.