Chinese hackers have cracked Apple’s iTunes gift card system and started selling counterfeit but functional iTunes vouchers on Chinese auction sites.

“As the trade has grown over the last six months or so prices have fallen from around $47 for a $200 card to 18RMB ($2.60). Music industry consultancy Outdustry confirmed that the counterfeit coupons work by buying a voucher and transferring the illegitimate credit into an iTunes account,” John Leyden reports for The Register.

“The fake gift card codes are reportedly created using key generators, an approach previously applied to Windows activation hacks,” Leyden reports. “A fix for the problem might prove problematic because adjusting the key generation algorithm might invalidate genuine gift cards.”

More in the full article here.