In an official report from China Customs, it is said that a batch of graphics cards with fake specifications and models were recently seized.
The company that imported the graphic cards, is XFX, a division of Hong Kong-based Pine Technology Holdings Limited, with headquarters in U.S., China, and more. And XFX's Asian branch, is found to have smuggled a shipment of graphics cards by putting fake labels on them.
The company did this to allegedly lower import tax.
The authorities did not confirm whether the Chinese branch of XFX is directly involved, however, the XFX’s website has been shut down.
The company has also closed its official store on T-mall retail website.
It began when both Shenzhen Meilin Customs and Huanggang Customs conducted a joint inspection of goods that were declared for imports at Huanggang Port.
It was during this time, that the officials discovered that some of the graphics card have their labels covered with other labels.
After further inspection, it was found that the specifications and models displayed on the actual labels covered were inconsistent with the declared specifications and models.
The officials then sampled and submitted some of the graphic cards for another inspection, in accordance with the law.
It was reported that the 5,840 mislabeled graphic cards were overseas version of the RX 6700 XT.
In total, the Chinese authorities have confirmed that a total of 5,840 graphics cards worth 20 million RMB, or around $3.15 million were seized because of this.
Graphic cards were once rare, simply because more and more people bought them for cryptocurrency mining.
This left retailers with leftovers.
As a result, graphic cards became more and more expensive.
But as the prices go down, some people started questioning whether the graphic cards they find in retailers are actually refurbished.
In this case, officials who knew that XFX didn't provide retailers with new RX 580 8GB, RX 590 8GB, RX 5600 XT, RX 5700 XT cards to retailers in China, suspected it for wrongdoing.
XFX admitted that the company received the chips directly from AMD, but rather than selling them to retailers, the company sold them all to cryptocurrency miners.
XFX isn't the only company conducting this shady business, as China has seen at least 150,000 graphics cards, both used and new, imported to the country this way.
