Preventing money laundering
Money laundering has become a growing concern in the online video gaming industry , as criminals are using virtual currencies and in-game items to launder illegal funds . 12 To combat this issue , many game developers have implemented fraud detection and prevention systems to detect and prevent suspicious transactions . These systems use machine learning algorithms to analyze transactions and identify patterns that may indicate money laundering .
To further combat money laundering in the online video gaming industry , some game developers have also introduced know your customer ( KYC ) and AML procedures to identify and verify the identity of players and monitor their in-game transactions . These procedures are designed to prevent illegal activities such as money laundering and to comply with the legal regulations and laws of the countries in which they operate . An example of this occurred with Linden Lab , the developer of the online game Second Life . Linden Lab announced in July 2019 that all Second Life users would “ need to register with its fully owned subsidiary Tilia Inc ., a money [ services ] business ( MSB ). As [ an ] MSB , Tilia is required to comply with AML / CTF [ counter-terrorist financing ] obligations under the Bank Secrecy Act and its implementing regulations , including in relation to customer verification and suspicious transaction reporting .” 13 This provides Tilia with the ability to combat any potential money laundering or other potentially suspicious activities that may be conducted through Second Life .
Money laundering incidents
In March 2023 , a proposal was submitted to a San Francisco federal court , which reported that Roblox , an online video gaming platform , faces a possible money laundering issue . As per a new court filing , over 300 users are allegedly laundering money by buying fake in-game items with in-game currency . 14 It has been reported that these users appear to be using the Roblox platform to send money to one another by purchasing fake items . In addition , there is some evidence to suggest that the majority of users are children who scam each other out of items that have an in-game value , which can then be sold for monetary value .
In November 2021 , Twitch , a video game streaming platform , confirmed that nearly $ 10 million was funneled through and laundered on the Twitch streaming
ACAMS Today June – August 2023 39