Virtual currencies and advent of money laundering in the virtual worlds
Metaverse games such as Second Life, and online games such as 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.
Part of what they purchase and receive is virtual currency in some games. 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. Despite the emerging risks, the world of the Metaverse is not something that law enforcement is looking at.
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.