Money Laundering Through Video Games

Money Laundering Through Video Games

(Last Updated On: January 25, 2023)

Money LaunderingMoney laundering Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions. Money laundering can be done through various mediums, leveraging a variety of payment vehicles, people and institutions. Through Video Games

How Transnational Organized Crime Is Hiding Their Money

How ScamsScams A Scam is a confidence trick - a crime -  is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. Work – A SCARSSCARS SCARS - Society of Citizens Against Relationship Scams Inc. A government registered crime victims' assistance & crime prevention nonprofit organization based in Miami, Florida, U.S.A. SCARS supports the victims of scams worldwide and through its partners in more than 60 countries around the world. Incorporated in 2015, its team has 30 years of continuous experience educating and supporting scam victims. Visit www.AgainstScams.org to learn more about SCARS. Insight

How Are Transnational Organized Crime Cartels Laundering Money Through Video Games?

Is that in-game purchase of virtual gold, Virtual Currency, a character, or skin part or weapon, game level up, etc. a money laundering operation?

The answer, in far too many cases, can be YES!

The transfer of funds online for video game merchandise has opened a path for online money laundering according to a newly released report by the Financial Crime Academy a leading provider of online training for the anti-money laundering community.

Online video games often offer a wide variety of in-game items that players can purchase with virtual currency or real money. These items can include:

  • ️Virtual currency (VC)
  • ️In-game items
  • ️Skins & cosmetics
  • ️Boosts & power-ups
  • ️Game currency
  • ️Virtual real estate
  • ️Game subscriptions or memberships

Microtransactions

The rise in the use of microtransactions, which may be part of the organization’s business model, is a source of income for the game designers and may be traded among the players for real or illicitillicit Illicit means something that is not legally permitted or authorized under the law; unlicensed; unlawful. It can also mean disapproved of or not permitted for moral or ethical reasons. goods. In other words, they have value and can be used to convert illegal money into fungible assets that can later be re-converted back into cash.

In 2019 Linden Lab, the company that created the virtual game platform “Second Life” implemented tightened anti-money laundering regulations to combat fraudFraud In law, fraud is intentional deception to secure unfair or unlawful gain (money or other assets), or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements. A fraud can also be a hoax, which is a distinct concept that involves deliberate deception without the intention of gain or of materially damaging or depriving a victim., money laundering, and terrorist financing.

Second Life has its own Virtual Currency, the “Linden Dollars” (L$) that can be credited against US dollar accounts. Linden Labs argued the L$ is not a Virtual Currency but “limited license permission to use features of Second Life.”

Cryptocurrency is also a Virtual Currency by the way!

However, in 2013 FinCEN disagreed and said the Linden Dollars L$ was a Virtual Currency.

New Report

The Financial Crime Academy report, now posted to their website, points out that online money laundering takes place in overcrowded virtual marketplaces, which increases the difficulty for law enforcement & financial investigators to track illicit transactions.

However, AML (anti-money laundering) and compliance professionals must now be on the alert for red flags of money laundering through video games which include:

  • Large or frequent transactions of Virtual Currency or assets, particularly when they are not commensurate with in-game activity or the individual’s known source of income.
  • Suspicious transactions involving Virtual Currency exchanges or third-party websites that specialize in buying and selling VC or assets.
  • Transactions involving Virtual Currency or assets that are subsequently converted to fiat currency or used to purchase goods or services in the real world.
  • Using multiple accounts or aliases to conduct transactions or hide their true identities.
  • Using Virtual Currency or assets to move proceeds of illegal activities.

What Does All This Mean?

It means that those in-game purchases may very well be supporting transnational organized crime and even terrorism financing. Your Candy Crush might be enabling the very thing you want to stop! And as a consumer, you need to know that your zeal to play may be part of the process that victimizes millions.

The use of online video games for illicit purposes such as scamming, terrorism, drug trafficking, and even child exploitation has been a concern for law enforcement for many years. But with the explosive growth in just the last three years, it is ever more important now.

Leveling up in virtual worlds is great, but are financial investigators & AML pros leveling up to confront the top tiers of money laundering through video games?

Unfortunately not as much!

Thank you to BIG – Blockchain Intelligence Group for this information and support.

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Essential Tools For Every ScamScam A Scam is a confidence trick - a crime -  is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. Victim From SCARS Publishing

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This program is designed to help scam victims struggling to recover on their own and for those who want to understand the overall process. You can be using other resources, such as traumaTrauma Emotional and psychological trauma is the result of extraordinarily stressful events that shatter your sense of security, making you feel helpless in a dangerous world. Psychological trauma can leave you struggling with upsetting emotions, memories, and anxiety that won’t go away. It can also leave you feeling numb, disconnected, and unable to trust other people. Traumatic experiences often involve a threat to life or safety or other emotional shocks, but any situation that leaves you feeling overwhelmed and isolated can result in trauma, even if it doesn’t involve physical harm. It’s not the objective circumstances that determine whether an event is traumatic, but your subjective emotional experience of the event. The more frightened and helpless you feel, the more likely you are to be traumatized. Trauma requires treatment, either through counseling or therapy or through trauma-oriented support programs, such as those offered by SCARS. counselingCounseling Counseling is the professional guidance of the individual by utilizing psychological methods especially in collecting case history data, using various techniques of the personal interview, and testing interests and aptitudes. A mental health counselor (MHC), or counselor, is a person who works with individuals and groups to promote optimum mental and emotional health. Such persons may help individuals deal with issues associated with addiction and substance abuse; family, parenting, and marital problems; stress management; self-esteem; and aging. They may also work with "Social Workers", "Psychiatrists", and "Psychologists". SCARS does not provide mental health counseling. or therapy, qualified support groupsSupport Groups In a support group, members provide each other with various types of help, usually nonprofessional and nonmaterial, for a particular shared, usually burdensome, characteristic, such as romance scams. Members with the same issues can come together for sharing coping strategies, to feel more empowered and for a sense of community. The help may take the form of providing and evaluating relevant information, relating personal experiences, listening to and accepting others' experiences, providing sympathetic understanding and establishing social networks. A support group may also work to inform the public or engage in advocacy. They can be supervised or not. SCARS support groups are moderated by the SCARS Team and or volunteers., or completely independent – on your own!

The SCARS Steps program is a complete program and is provided for the purpose of helping scam victims to overcome this experience. Throughout this SCARS Steps Program, we speak about issues and challenges that a victim may have and help guide them through their recovery. But each person is different and it is important to understand your own reasons for being vulnerable to being scammed.

After the trauma of being scammed, you need to take steps to recover and move on. This may be an alternative to counseling in the short term, but we still encourage you to seek out professional help & support. Throughout this SCARS Steps Program, we speak about issues, challenges, defects, or problems that a victim may have in a generalized way.

The SCARS GREEN BOOK will help you recover from your scam offline and it will always be there when you need it!

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A Guide For Families & Friends Of Scam Victims

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This SCARS Publishing book represents a complete guide to help the families and friends understand how these scams work and how to help the victim.

The SCARS Slate Book should be purchased by family and friends to better understand what happened to the victim and the traumatic impact on them. But it can also be shared by the victim so that they do not have to explain to family and friends about the scam. This publication is to help others to help Scam Victims to make it through this traumatic experience and recover.

Each person is different and it is important to understand how relationship scamsRelationship Scam A Relationship Scam is a one-to-one criminal act that involves a trust relationship and uses deception & manipulation to get a victim to give to the criminal something of value, such as money! Click here to learn more: What Is A Relationship Scam? work and why people are vulnerable; to being scammed, how they were lured in, then groomed and manipulated. This understanding is essential in helping them through the process of ending the scam and then on to recovery. The SCARS Slate Book will provide the information necessary to help support a victim through this process.

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Your Personal Scam Evidence & Crime Record Organizer

ORGANIZE YOUR INFORMATION TO MAKE THE REPORTING PROCESS SIMPLE!

Helps you get and stay organized. This publication is to help Scam Victims organize their crime information. Complete this information before reporting to the police then bring this book with you

Before or after reporting to the police the RED BOOK gives you a dedicated tool to record all the essential facts of this crime. The Victim, the Scammers, the Money, and your Police interactions. Everything that really matters can be easily recorded for your immediate use and for the future!

As we have seen, money recovery/repayment programs can become available years after the scam ends and you need to keep all the details of this crime in case it is needed. We have also seen scammers being extradited to the U.S. and other countries, this will help in the event you testify or give statements, Additionally, this helps you have your information ready to qualify for victims’ benefits, compensation, or aid.

The Official SCARS RED BOOK is your way of recording all the important facts of this crime so that you do not lose essential information, Complete the RED BOOK then put it away with the confidence that you will have it if or when it is needed.

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SCARS LIME BOOK - Wisdom & Motivation for Scam Victims
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U.S. FTCFTC The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) U.S. antitrust law and the promotion of consumer protection. The FTC can also act as a clearinghouse for criminal reports sent to other agencies for investigation and prosecution. To learn more visit www.FTC.gov or to report fraud visit ReportFraud.FTC.gov at https://reportfraud.ftc.gov/#/?orgcode=SCARS and SCARS at www.Anyscams.com

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By the Society of Citizens Against Relationship ScamsSCARS SCARS - Society of Citizens Against Relationship Scams Inc. A government registered crime victims' assistance & crime prevention nonprofit organization based in Miami, Florida, U.S.A. SCARS supports the victims of scams worldwide and through its partners in more than 60 countries around the world. Incorporated in 2015, its team has 30 years of continuous experience educating and supporting scam victims. Visit www.AgainstScams.org to learn more about SCARS. Inc.

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