Play-to-earn games are comparatively new game worlds that are still widely unknown outside the crypto and gaming crowd. What’s new here is the use of decentralized, blockchain-based ways to buy items in-game and make them tradable beyond the game itself.
In other words: In-game artifacts have real value through the allocation of tokens, which can be collected across games and exchanged for other crypto or fiat currencies such as Euros or Dollars. Digital potions, swords, and spaceships can thus be used to move and launder profits from criminal activities.
But how exactly can money launderers abuse online games?
Due to their unregulated status and little to no know-your-customer rules, the video game industry is vulnerable to criminal activity, especially in the market for online multiplayer games.
Conventional games only allowed the purchase of in-game items. Until the introduction of tokenization, gamers used artifacts for little more than cosmetic purposes, such as a new look or extra powers for the avatar.
Now, however, they can be traded, even beyond the game, on secondary markets. Virtual items thus become a surrogate for value.
Online game currencies and digital artifacts
Suppose a money launderer deposits cash at a poorly regulated bank.
Instead of making a transfer to an accomplice’s bank account, online game currencies or digital artifacts can be purchased and transferred to the accomplice’s game character, who in turn can resell them for “real money.”
Alternatively, the login data of an entire game account can be transferred.
Tokens
There are no country borders for tokens. Users can easily transfer tokens abroad across all borders, sometimes even pseudo-anonymized in such a way that tracking is no longer possible.
Depending on the type of tokens and the country in which they are being traded, various legal regulations and requirements make the situation even more confusing for the investigating authorities.
This phenomenon is new, but the fundamental challenges surrounding the fight against money laundering continue to pose a threat to our societies, no matter which channels the money launderers choose to pursue.
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