IPv4 addresses used without permission: 5 years in prison

There are less than four billion IPv4 addresses available for use and practically all of them are already assigned to subjects who use them in various capacities. The introduction of IPv6 (Internet Protocol v6), a protocol increasingly used worldwide, allows us to deal with this shortage of addresses. Address blocks IPs have been awarded over the years to various individuals, entities that meet certain criteria and requirements.

The global shortage of IPv4 addresses has transformed them into a “rare commodity” so much so that each address in the classic dotted decimal notation it can yield between approximately 15 and 25 euros on the market.

Some Europen providers, especially those who have started their activities more recently, use techniques such as CGNAT and MAP-T to “extend the life” of IPv4, sharing IPs available among multiple subscribers.

IPv4 address trafficking: US company CEO sentenced to 5 years in prison

Well-known journalist and investigative reporter Brian Krebs tells the story of Amir Golestan, CEO of a technology company based in South Carolina (USA). After rejecting all the charges initially leveled against him, in November 2021 Golestan pleaded guilty to the 20 crimes ascribed to him.

Golestan was then sentenced to 5 years in prison for wire fraudin particular for having fraudulently obtained further 735,000 IPv4 addresses. The manager would in fact have set up an elaborate network of companies to mislead the managers of ARIN (American Registry for Internet Numbers), a non-profit organization that oversees IP address ownership in the US, Canada and parts of the Caribbean. The activity of shell companies was supported through the production of affidavits in the names of people who do not actually exist.

The US government consequently objected to Golestan 20 counts for wire fraud, one for each payment made by the fake companies that purchased IP addresses from ARIN. Thus, by building a network of effectively non-existent companies, the CEO would have managed to keep hundreds of thousands of IPv4 addresses for himself and then resell them to third parties. Prosecutors estimated that these addresses had a value between 10 and 14 million dollars.

Scams at regional Internet Registries can be very costly

In a statement released in these hours, ARIN spokespersons commented that the sentence issued by the South Carolina judge against Golestan will act as a deterrent for those who are studying fraudulent schemes to obtain or transfer Internet resources. “Those who attempt to defraud ARIN or other regional Internet Registries are subject to costly and serious civil litigation, criminal charges, and ultimately a lengthy prison sentence“, add the ARIN spokespersons, highlighting that the scams linked to request for IP addresses they should not be taken lightly.

In Europe the organization that oversees theassignment of IP addresses is the RIPE NCC (European IP Networks Network Coordination Center), headquartered in Amsterdam, the Netherlands.

Golestan has sold major blocks of addresses to VPN service providers

According to Krebs, some of the addresses collected by Golestan would have ended up in the crosshairs of Spamhaus, a solution that many network operators rely on to combat the wave of unwanted emails. Golestan then began reselling IP addresses primarily to companies that market VPN services and which help users hide their real IP addresses online.

In a 2020 interview with Krebs, Golestan claimed that his company was responsible for negotiating approximately 40% of IP addresses collectively used by the largest VPN service providers in the world.

The Department of Justice says the manager will serve 60 months in prison, followed by an additional 2 years of court-ordered supervision. Micfo CEO is obligated to pay nearly $77,000 in compensation to ARIN for consulting work he did assisting the feds.


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