Late last year, some 50 police officers arrested three individuals associated with the Black Hawk Safety Net (3800cc.com), a group that allegedly sold training materials and malicious code for illegal hacking, according to reports in China's state-run media.
About 1.7 million yuan ($249,000) of the group's assets were frozen, according to the English-language China Daily.
Established in 2005, Black Hawk Safety Net counts over 170,000 non-paying members and about 12,000 people with paid memberships.
It's not immediately clear why it had taken until now for Chinese authorities to disclose the arrests.
The news comes after Google last month said that in December it "detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property."
As a consequence of the attack and separate efforts by online attackers to compromise the Gmail accounts of Chinese human rights activists in China, Europe and the U.S., Google said it would stop censoring Google.cn, a promise it has yet to fulfill.
The U.S. State Department subsequently asked the Chinese government for an explanation of the attacks.
Authorities in China responded that hacking is illegal in China, that the country welcomes law-abiding companies, and that China, more than the U.S., is the largest victim of hacking attacks. China's computer security organization, the National Computer Network Emergency Response Coordination Center of China, claims that hackers in the country caused 7.6 billion yuan ($1.1 billion) in damage last year.
Joe Stewart, a cybersecurity researcher for SecureWorks who linked the Google attacks to China, doubts the arrests will have much impact. "I guess it helps China save some face in light of all the disclosures coming out of China," he said in a phone interview. "I don't know that it will do very much about cybercrime."
Scott Henderson, who tracks the Chinese hacking scene on a Web site called The Dark Visitor, observes that the crackdown follows from an investigation of a cyber attack that took down Internet access in the Chinese city of Macheng for three days. One of the hackers responsible had commercial ties to one of the men associated with Black Hawk Safety Net.
"The unwritten rule among Chinese hackers is never hack inside China," he said in an e-mail. "As disposable income becomes more abundant, groups are starting to break that law and Beijing is cracking down on them. Laws against domestic hacking have been strengthened with longer prison sentences for violations."