[altmanaltman]

"Token reseller market" is a fancy way of saying credit card fraud. If someone stole xboxs from stores using stolen credit cards and then sold them at 10% of their price, at what point is it a "resller market" and not "criminal enterpirse"?

[jonfromsf]

These aren't stolen credit cards. This hack works by maxing out subscription limits of the Anthropic/OpenAI plans, so you never pay additional API fees. It's fraud but not theft.

[chihuahua]

The article mentions that stolen credit cards are being used to buy some of the tokens. Also credit card chargebacks (pay for tokens with CC, resell tokens, then do a chargeback.)

[peyton]

It’s pretty clearly theft of services as generally defined in most places. It’s a hack in the same sense that rolling back your electric meter is a hack.

[miohtama]

Violation of Terms of Service is civil, not criminal, matter.

[jbstack]

If it amounts to fraud, then it's also criminal.

For example, if you take out a loan and you sign terms and conditions which say you agree to pay it back and then later your circumstances change and you can't pay, that's probably just a civil matter. But if, at the time you signed the agreement, you had planned to deliberately not pay it back, that's fraud and therefore criminal. The fraud is in the fact that you are making a false representation: you are saying you will pay it back, but you know that to be false. It's a very different thing from believing it to be true, but it then later turns out not to be true.

The same principle applies to LLM subscriptions (or any other contract).

[__MatrixMan__]

With theft, somebody ends up without an Xbox. Theft is wrong. This is mere breach of contract, whether it's wrong depends on the contract.

[selectodude]

You’ll have to clarify who the counterparties are to this contract and where the person whose credit card was stolen fits into it.

[__MatrixMan__]

I don't doubt that stolen cards are involved, but you could say that for anything that has to do with card-not-present transactions, e.g. Amazon retail. Is there reason to believe that it's especially prominent in this case?

I assume most of it is just people who want cheaper access to these models and don't mind subsidizing access via somebody who is simultaneously distilling the model.

[raincole]

In your world model, hardware and electricity are made out of thin air?

[mynegation]

What?! It is definitely credit card fraud, and a criminal enterprise, and by any definition it is wrong. I cannot imagine a jurisdiction where this is a “mere breach of contract”.

[__MatrixMan__]

Where are you getting the idea that the cards are stolen? Sure it's mentioned that some of them likely are, but there's no reason to believe that that's most of them or that the fact that they're stolen has anything to do with the way this market functions.

This is about controlling who gets to use the tokens for what, not about payment fraud.

[zht]

What?

[phildenhoff]

It's not _theft_ because nothing is _stolen_. The tokens are being used in a way that breaches the contract agreed to by whomever set up the account with OpenAI, Anthropic, Kilo, Antigravity etc. but it's not theft.

[chasd00]

The credit card and the money is what was stolen.

[__MatrixMan__]

Are we reading the same article? That's mentioned once, as a potential alternative, nested in a bulleted list of alternatives. This is not an article about credit card fraud.

This is about people circumventing the model company's attempts to protect their intellectual "property" (which, if you insist on that incoherent usage of the word "property", they themselves stole from the rest of us).

It's equivalent to buying a DVD in the US which is region-locked to Asia. Grey market, not black market. If you use a stolen credit card to buy that DVD, well tat's a totally separate matter.

[1337h4xx]

It's mostly refunding and card fraud because "bad money drives out good" in any marketplace. It's equivalent to getting a refund on an Amazon package you received, which is why a frontier model is being sold at around 2% of the face value.

[__MatrixMan__]

Right, theft requires that there be somebody who no longer has access. This is about too many people having access. Piracy might be a more fitting term.

[iansmith_hn]

Fair enough. Is the right enforcement then to ignore the "token resellers" and go after the credit card business listed at the "upstream" on his post?

[glerk]

one man's fraud is another man's arbitrage opportunity