The three unidentified individuals were arrested after using the now-defunct 3800CC.com web site to train and provide the necessary tools to wannabe hackers, according to the state-run Xinhua news agency. Government authorities seized $249,000 in cash, nine servers, five computers and a car from the company.

Last year, China made it a crime to provide other people with hacking tools.

More than 195 million Internet users were attacked by viruses and Trojan horses online within the last six months of 2009, and the accounts and passwords of 110 million users were stolen, according an annual report by the China Internet Network Information Center. Increasing users' trust in the Internet has become "a problem pressing for solution at present," the report determined.

Two men, identified as Li Qiang and Zhang Lei, were listed as the founders of Black Hawk Safety Net in a separate case from 2007. The founders were arrested at that time after their involvement in a virus that caused problems on both private and government computers in the city of Macheng, Xinhua reported.

Delayed Reaction

News of the arrest, however, comes nearly three months after the three were arrested by police in the Hubei province. The delayed announcement comes just weeks after China's government has denied having any knowledge of a major attack on Google's China-based service. Google, however, came under attack by what many believe was a Chinese hacker.

Some believe the attack was done to sabotage Google's service in China in an effort to increase the number of users and advertisers who frequent Baidu, Google's China-based competitor.

"The digital spying in this case and several other cases originated from certain Chinese Army (PLA) operation centers, known for their autonomous action-based perspective and private enterprise, if paid enough but not from or ordered by the Chinese central government itself," said Jart Armin, a security expert with HostExploit.

While news of the arrests has come to light in the mainstream media in China and in the United States, many in the hacker community were discussing the arrests when they occurred back in November.

"It would appear only when the China News reissued the story today, it gained any notice in the Western media," Armin said. "Obviously this is China demonstrating they are ahead of the game, and we are only really interested because of Google being hacked for now in what appears to be industrial espionage."

U.S. Reaction

Some believe news of the arrest came under the spotlight again because of China's public-relations campaign against hacking. China ramped up its anti-hacking campaign after U.S. government officials, including Secretary of State Hillary Clinton and Sen. Richard Durbin, pleaded to U.S. technology companies operating in or providing products and services to China to take a better look at their operations.

U.S. officials want companies to stop any service in a nation that may be enabling violations of human rights. Specifically, officials want Google and other companies to stop enabling censorship of information in countries like China, Iran and Uzbekistan. After Google was attacked, the company decided to no longer provide censored information to its users in China and even considered shuttering operations in China, a country with 338 million Internet users.
 

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