Microsoft is taking a mysterious Chinese gaming company to court for, the tech giant alleges, hacking into Xbox servers and stealing cryptocurrency.

In a civil suit filed in a California court, Microsoft has accused online vendor iGSKY of having, according to court documents, unlawfully acquired Microsoft account credentials and bought virtual gaming currency with the credit cards linked to those accounts.

The China-based iGSKY sells virtual currency typically used in vast online role playing and mobile games. The website bills itself as a “world leading MMORPG service company”, which provides professional game currency, among other things, for a variety of popular games including Pokemon Go, FIFA 16 and Grand Theft Auto V.

Microsoft discovered iGSKY late last year selling currency which is only available on the Xbox platform. Upon further investigation, it was discovered that iGSKY’s parent company, Gameest International Network Sales, Co. Ltd, had used credentials from previous massive breaches to access Microsoft user accounts and buy virtual Microsoft currency. A Microsoft investigation found nearly $US2 million in fraudulent transactions.

The court documents allege that iGSKY doesn’t just sell the stolen currency but also access to the compromised accounts while “reaping millions of dollars in illicit profits from their illegal enterprise”.

The identity of the defendants, whoever is behind iGSKY and Gameest International, is currently unknown but they are believed to be Chinese nationals and a judge has already frozen the company’s PayPal accounts.

The compromised accounts only represent a small fraction of what could have been. According to Microsoft, the company’s anti-fraud systems detected tens of thousands of attempts by the defendants to gain unauthorised access to Microsoft accounts.

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