Cyberlaundering

According to this article in PoliceOne.com, online virtual games are fast becoming a preferred method of money laundering proceeds of crime for criminals. Online games such as “Second Life”, “World of Warcraft” and “Dungeons and Dragons”, allow players to purchase goods and services using real credit or charge cards (i.e., American Express), electronic payment methods (i.e., Pay Pal), and open-loop pre-paid access products. Players can transfer, buy and sell goods and services using virtual currency that can be converted into real currency and cashed out. The games also allow transfers of virtual currency to other players anywhere.

Theoretically, criminals can use online games to funnel proceeds of crime from one jurisdiction to another, avoiding the regulatory safeguards in place to detect money laundering and terrorist financing.

Misha Glenny, the author of “McMafia: A Journey Through the Global Criminal Underworld” indicates in the PoliceOne.com article that there is little government oversight of the virtual money circulating in online games. It  ”takes place well below the radar of Interpol and global bank regulators… terror networks and transnational gangs are using these games to move cash from weapons deals, smuggling, prostitution and more.”

There is no data available on the amount of money laundering or terrorist financing occurring through online virtual games, if any, but the amount of real currency changing hands in these games totals hundreds of millions of dollars.