Four students at the Massachusetts Institute of Technology are facing a New Jersey fraud investigation for a Bitcoin mining project created at a hackathon. But despite the legality of the students' invention, MIT has been accused of not immediately rallying behind its students and their innovative work. 

Two anonymous-yet-prominent university figures are seeking signatures for a letter addressed to MIT president Rafael Reif, which criticizes the university for not supporting the students. According to the letter, MIT’s lawyers told the students they would not get involved in a case that didn’t directly involve the university. However, MIT provost Martin Schmidt said the university advised the students to get their own lawyers and MIT would support them as best they could, according to The Boston Globe.

The students’ invention, called "Tidbit," would allow Internet users to loan computing power to website owners for the sake of mining Bitcoins in exchange for not seeing ads on the site. Tidbit is still a prototype, but according to the Globe, New Jersey authorities subpoenaed Tidbit’s developers for source code and documents related to the project, and are investigating whether the project violates New Jersey’s consumer fraud act. 

The Electronic Frontier Foundation (EFF) is working to reverse the subpoena in court, challenging the state's ability to regulate out of state Internet activity over Jeremy Rubin, the founder of Tidbit and a Massachusetts resident. The EFF also challenged that the subpoena infringed on Rubin's right to not incriminate himself, because the order could expose him to liability under the federal Computer Fraud Abuse Act and New Jersey's anti-hacking statute, according to the EFF

Tidbit’s case parallels that of Aaron Swartz, an programmer and activist who killed himself in January 2013 after facing federal felony charges related to downloading millions of academic journal articles on MIT’s network. Critics at the time said MIT should have done more to support his legal battle. 

In response to the criticism, MIT president Reif issued his own letter claiming Tidbit has the support of MIT and that the university should provide students with better resources for legal counsel. 

Beyond this specific case, I believe we should provide our student inventors and entrepreneurs with a resource for independent legal advice, singularly devoted to their interests and rights. I have asked the Provost, Chancellor and General Counsel to develop and submit to me a specific proposal for creating such a resource, which will add an essential new strength to MIT’s innovation ecosystem.

Update: A link back to the Electronic Frontier Foundation's case in support of Jeremy Rubin has been added to provide clarity. 

Correction 2/19: An earlier version of this story incorrectly stated Aaron Swartz's academic affiliation. He attended Stanford and was a Harvard research fellow when he downloaded the academic journal articles on MIT's network.

Lead image by Francisco Diez on Flickr.