A Heise investigation of used Seagate datacenter-grade hard drives sold as new revealed that they originated from Chinese cryptocurrency mining farms that used them to mine Chia several years ago. This does not deny that the fraudulent HDDs were obtained from channels that did not buy from official distributors; the results confirm this.

Investigations suggest the used HDDs originated in China, likely from cryptocurrency mining farms that previously mined Chia. During Chia’s peak, HDD demand surged, leading to shortages and price hikes. However, the economic sense of Chia mining declined over time, leading to many farms shutting down and flooding the market with second-hand drives. According to the report, these drives — many with 15,000 to 50,000 hours of prior use — had their internal records altered to appear unused. Seagate denies involvement; it has launched an investigation and now offers a tool to determine whether HDDs are shiny new or used (more on later).

Reports — over 200 of them so far — of affected HDDs have now surfaced worldwide; cases reported include not only in Europe but also in Australia, Thailand, and Japan. The fraudulent sales were first reported in January when it was discovered that supposedly new Seagate Exos datacenter-grade HDDs had been used for thousands of hours.

Resetting the SMART parameters that track drive usage concealed the actual wear. However, a deeper analysis using a query of the FARM (field-accessible reliability metrics) values reveals the operational history.

Retailers have responded differently to the scandal. Alternate claims neither the store nor its German suppliers knew the drives were not new, but it suggests customers contacted the store using an email. Galaxus has set up an online help page, while Proshop allows free returns and replacements. Some sellers state that warranty laws apply, while Wortmann insists on checking the HDDs before offering compensation.

Seagate has distanced itself from the issue, insisting it only distributes genuine new drives. It announced a full-scale investigation and has urged affected buyers to report fraud cases directly via fraud@seagate.com. The company believes the drives were resold as new somewhere in the secondary market before reaching customers.

Buyers concerned about their purchases can verify HDD usage. SMART parameters are sometimes unreliable, but the true operational time can be checked using FARM values. To do this, one has to use the Smartmontools application version 7.4 or higher (via command: smartctl -l farm /dev/sda) or Seagate’s Seatools software.