Seagate Uncovers Alleged Counterfeit Workshop
On 15 August 2025, tech news site Heise reported that Seagate, working with Malaysian authorities, had reportedly uncovered a fraudulent operation outside Kuala Lumpur where used hard drives were allegedly refurbished and resold as new.
The discovery followed months of warnings from customers who received suspicious drives, some of which appeared to come from cryptocurrency farms in China.
How the Scam Allegedly Worked
The operation allegedly involved erasing SMART values—data that shows a hard disk’s usage history—from used drives. Fraudsters reportedly sourced many of these drives from abandoned Chia coin mining farms.
They allegedly wiped the disks, cleaned them, relabeled them, and packaged them to appear brand-new.
Unlike some other brands, Seagate drives reportedly store additional data that fraudsters cannot fully delete. This made them central to uncovering the fraud.
The Raid in Malaysia
Back in May, Seagate’s security team in Singapore and Malaysia, together with the Malaysian Ministry of Domestic Trade, reportedly raided a cramped storage unit near Kuala Lumpur. Investigators allegedly found nearly 700 Seagate drives, along with models from Toshiba and Western Digital. The workshop was reportedly not only refurbishing disks but also handling sales and logistics—an “end-to-end fraud,” according to Seagate’s Senior Security Manager, Roy Khuan.
The syndicate allegedly targeted sales online through Shopee and Lazada. A Malaysian sales manager reportedly flagged unusually cheap high-capacity drives, prompting Seagate to buy one for verification. After confirming it was counterfeit, authorities were alerted.
Technical Evidence
Some of the fraudulent drives allegedly carried FARM values (Field Accessible Reliability Metrics) that investigators could not easily reset. These values reportedly revealed runtimes averaging 25,000 hours, showing the drives had already seen heavy use before being resold as “new.”
Investigators also reportedly discovered that fraudsters had illegally upgraded certain drives, reconfiguring older desktop models to pass as more expensive surveillance-grade hard disks.
Global Reach of Fraud
The Malaysian raid is part of a larger pattern. Customers in Germany, Austria, Switzerland, Luxembourg, the UK, Czech Republic, USA, Australia, and Japan have reportedly received suspect drives.
According to Heise, the origin likely traces back to cryptocurrency “Chia” farms in China. Fraudsters reportedly removed at least one million drives from the Chia network when it collapsed, and investigators estimate that around 400,000 Seagate drives entered resale channels.
Consumer Risks
For many buyers, the biggest issue is warranty. Numerous counterfeit drives were OEM models—originally sold in bulk to manufacturers—which means they carry little or no direct warranty from Seagate or Toshiba. Others had warranties that had long expired, leaving customers without protection if the drives failed.
Even some official dealers unknowingly stocked counterfeit drives, highlighting how deep the problem has spread into legitimate supply chains.
Links to Wider Criminal Syndicates
Seagate’s Vice President for Global Trust and Security, John Abrenilla, told Heise that such schemes reportedly spread across international marketplaces and may involve organized crime syndicates.
Investigators allegedly found six low-level workers in the warehouse, while they suspect the real organizers remain higher up the supply chain.
Seagate’s Countermeasures
In response, Seagate has reportedly strengthened its global partner program, obliging distributors to source drives only from authorized suppliers.
The company has also tightened trade screenings in an effort to reduce counterfeit sales.
Why This Matters
This incident underscores the alleged global risks of counterfeit technology. Customers from Europe to the U.S. and Asia have reportedly purchased used drives passed off as new, often losing warranty protection and device reliability.
The reported raid shows how counterfeiters allegedly exploit e-commerce platforms and international supply chains, highlighting the importance of consumer caution and corporate vigilance.
Sources: Heise, Lowyat.net, HTeknologi, Amanz.my & Seeni.my
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