According to a story on The Verge, Microsoft claims a Chinese gaming company, iGSKY, has been hacking Xbox accounts since 2015. On its website, iGSKY, offers cheap in-game credits and other bonuses on Xbox Live. However, in actuality, Microsoft alleges, iGSKY is taking those items from actual Xbox Live accounts.
Microsoft claims that iGSKY has made over $2 million in purchases through hacked accounts and using Xbox Live users' credit cards. The iGSKY website offers deep discounts on in-game points for games like FIFA 17, Forza Horizon 3, Grand Theft Auto V, and other games.
A Microsoft spokesperson gave an official statement to The Verge:
“Microsoft is committed to providing customers with safe and secure online experiences. We filed these lawsuits to protect our Xbox customers from the illegal trafficking of stolen property.”
The Verge offered more details on how Microsoft came to bring the suit against iGSKY:
"Microsoft’s in-house fraud investigators began looking at the site in December, making a number of purchases on iGSKY to build the case. In one case described by senior investigator Jeremy Beckley, Microsoft’s fraud team purchased 11,000 FIFA points on iGSKY.com, paying $60. Immediately afterward, Xbox Live received an email and password change for an eight-year-old account, which then proceeded to purchase 11,000 FIFA points for $127.54. It’s unclear how the group gained access to the account, although there was no indication of a broader breach of Xbox services.
iGSKY delivered the credentials to Microsoft’s investigations team in an email, along with instructions to spend the points as soon as possible. Shortly after that, the original owner of the account contacted Xbox customer support, complaining that he had been locked out of his account and unauthorized purchases had been made."
By using this evidence, Microsoft is bringing a number of charges against iGSKY, and although it will be very difficult to shut down the website, Microsoft can make it harder for the website by shutting down its PayPal accounts.
Here is a PDF of the lawsuit: Microsoft Virtual Currency Suit