German police arrest 2 in computer fraud probe, seize ill-gotten bitcoins worth $950,000

BERLIN (AP) — German police say they have arrested two people and seized illegally generated bitcoins worth more than 700,000 euros ($950,000) in an investigation of computer fraud.

The Federal Criminal Police Office said Wednesday it staged searches earlier this week in an investigation of three people suspected of manipulating existing malware and spreading it over the Internet, creating a remotely controlled network of compromised computer systems.

Police say the perpetrators used the processing power of the hacked computers to generate bitcoins, a cryptography-based digital currency. They also are investigating further suspected fraud, violations of copyright law and offenses related to the distribution of pornography.

They gave no details on the two people who were arrested Monday, one in the southern state of Bavaria and the other in Lower Saxony, a northern region.