Gaming the System: Money Laundering through Microtransactions and In-Game Currencies

Alexandra Norton


With what seems like new technological advances developing daily, cybercrimes are becoming more and more common, with little to no policing in place. As of December 2018, there were more than 4.1 billion internet users in the world.[1] It is estimated that cybercrime has inflicted global losses of over one billion dollars.[2] While there are currently laws and policies in place for certain online transactions, specifically online gambling, there are no laws or regulations in place in the United States when it comes to laundering money through microtransactions or in-game currency transactions. Currently, videogames do not have any governmental regulation when it comes to monitoring currency transactions. Instead, it is up to the company itself to regulate and monitor its own transactions and to punish individuals who act immorally in the game. These punishments usually involve a ban from the game but have no legal consequences.

There are many issues faced when it comes to these new methods to commit cybercrime. With the influx of new technology, these issues will create new and possibly more efficient means to launder money. One example of these new technologies is cryptocurrency, which is a type of virtual currency that functions as a real currency but is not issued or backed by central governments.[3] The traditional methods for money laundering, such as the use of shell companies, offshore accounts, or fraudulent record keeping, are not always going to be the most effective and inconspicuous ways to launder money. Prosecutors and policy makers are currently focused on the traditional money laundering methods and not on the ones involving new technologies because the usual methods are what have been used for an extensive period of time, while the new methods are appearing as technology continues to advance. Because of these advancements, cybercriminals are beginning to turn to new ideas such as laundering money through in-game currencies and microtransactions.

Money laundering involves three steps: placement, layering, and integration.[4] Once the dirty money has been obtained, criminals place it into things such as shell corporations, companies that exist only on paper but do not have any employees or physical offices.[5] This is when most criminals are caught because placing large amounts of money into accounts without a verifiable source looks suspicious if not done carefully.[6] After the placement, the money needs to be layered or exchanged through multiple transactions so that the original source cannot be traced.[7] Finally, the laundered money is integrated back into the legitimate financial world.[8] This is usually done through bank notes, loans, or any number of recognizable financial instruments.[9]

The United States has several pieces of legislation in place to help battle this growing problem, but none of this legislation is aimed specifically at money laundering through microtransactions and in-game currencies. Congress passed the Bank Secrecy Act (“BSA”) in 1970 as the first law to fight money laundering in the United States.[10] The IRS discusses the Bank Secrecy Act, stating that it“…requires businesses to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax, and regulatory matters. The documents filed by businesses under the BSA requirements are heavily used by law enforcement agencies, both domestic and international to identify, detect and deter money laundering whether it is in furtherance of a criminal enterprise, terrorism, tax evasion, or other unlawful activity.”[11] The Money Laundering and Financial Crimes Strategy Act of 1998 amended the BSA in part by requiring the U.S. Treasury and Justice Departments and Executive Bank to submit an annual National Money Laundering Strategy.[12] The U.S. government is partnered with a number of participating federal agencies to create the document that lays out objectives each year and reviews the objectives from the previous year.[13] The United States enacted the Computer Fraud and Abuse Act (“CFAA”) in 1984.[14] Unfortunately, the CFAA seems to struggle to keep up with new technologies and is almost always in a constant state of needing to be amended. Additionally, the CFAA deals more with unauthorized access or exceeding authorized access of a computer or network rather than the crimes that take place on a computer or the internet.[15] The CFAA does little, if anything, to address the new and emerging criminal activities that are taking place in cyberspace and it does not reach beyond the boundaries of the United States.

Microtransactions are just one of the many ways that criminals are laundering money as technology continues to develop. Microtransactions are systems that allows players to purchase virtual currencies, digital assets, and additional gaming content.[16] In a featured article on GameSpot, author Eddie Makuch discusses microtransactions, stating“[t]he name derives from the fact that, oftentimes, a microtransaction purchase is small in price and function, typically no more than $10. Lower-priced microtransactions in the range of 99 cents to $10 may make up the bulk of sales, but it’s not the only option. Many games, on console, PC, and mobile, offer ‘micro’ transactions that cost up to $100 or in some cases even more.”[17] Microtransactions are present in mobile apps and free-to-play model games such as League of Legends or Fortnite. Microtransactions are also present in games in which players have to initially purchase a base game, usually in the form of loot boxes; an example of these games is Overwatch. Base game purchasing occurs when an individual pays a base price for access to a game, and then the individual will pay for access to extra things within the game through microtransactions. Videogame publisher Activision is well known for using microtransactions as a source for a constant revenue stream. In 2017, Activision Blizzard reported more than $4 billion in revenue from microtransactions alone.[18]

Microtransactions are frequently used in free-to-play and mobile game markets in the form of in-app purchases.[19] Free-to-play and mobile games use microtransactions to attract players who can play the base game for free but have the option to purchase additional content through in-app purchases.[20] The free-to-play model can be attractive to some because they think that they aren’t paying anything, but, through clever scheming, game developers can lure players into spending extra money on purchases through microtransactions. An example of this would be Fortnite. Fortnite is a free-to-play game that offers cosmetics and battle passes to earn more cosmetic items.[21] In a survey conducted in 2018, 68.8% of Fortnite players said they spent money on the game and, of those who spent money, they spent an average of $84.67.[22] With over 125 million players, Fortnite is earning several hundred million dollars a month off of a free-to-play microtransactional model.[23]

Another way that criminals are laundering money is through in-game currencies. In-game currencies are exactly what they sound like: some form of currency in a virtual world. Depending on the game, in-game currency can be obtained in a variety of ways, but they all involve time and effort. Massively multiplayer online role-playing games (“MMORPGs”), such as World of Warcraft, Final Fantasy XIV, and Star Wars, all have in-game currencies and even their own in-game economies. For example, in World of Warcraft, characters can receive gold in numerous ways. Characters can loot gold off of a dead enemy or sell items in the in-game auction house and receive gold from another player, paying a fee for using the auction house that gets put back into the game economy. In MDY Industries, LLC v. Blizzard Entertainment, Inc., the United States Court of Appeals for the Ninth Circuit discusses the same idea stating that “[a]s a player advances, the character collects rewards such as in-game currency, weapons, and armor. WoW’s virtual world has its own economy, in which characters use their virtual currency to buy and sell items directly from each other, through vendors, or using auction houses.”[24]

Most games ban in-game currency transactions, but this has not stopped the market for this activity. There are websites that offer individuals the opportunity to buy and sell in-game currencies for real money. Because this act alone is not considered a crime, there is no government regulation or monitoring. It is up to the game companies themselves to try and police and monitor players who break the rules of the game. If a player is caught buying gold on World of Warcraft, Blizzard can ban that player’s account or take that gold away; the player spent their money for nothing. As mentioned previously, Blizzard monitors these types of transactions through its game and takes the gold away or bans the accounts, but there is no government monitoring or regulation, making it a perfect way for criminals to launder money.

It is not uncommon for criminals to invest into legitimate businesses to cover up a money laundering operation. Free-to-play games that rely on microtransactions could continue to develop a way for criminals to launder their money. This would require criminals to invest into the creation of a semi-successful game in order to launder the money through it. Criminals invest into real businesses to launder their money, so why not one that sells virtual, useless items?[25] Laundering money through microtransactions would be harder to track because the transactions would not draw a lot of attention or suspicion. Microtransactions, by their nature, are small transactions. Because the transactions are smaller, criminals would have a lot of small transactions being recorded multiple times. Through a free-to-play game or mobile game, microtransactions are common, and the money would not look suspicious coming through in the small increments.

Another way that criminals could launder money with microtransactions is through selling accounts on games such as Fortnite. A criminal could create an account, buy cosmetics through microtransactions with illegal money on that account, and then sell the account online for real, clean cash. Fortnite accounts can sell anywhere from $5 to $3,500.[26] Usually, in cases like this, the laundered money comes in the form of stolen credit cards. By the time the crime has been reported, the account is already sold, and the money that the criminal has received is “clean” money. If this method of laundering money was applied to the three steps of money laundering, the placement step would occur when the criminal buys cosmetics through microtransactions with the illegal money. The layering step would be also be fulfilled by the criminal using microtransactions to buy cosmetics, as there are multiple transactions that hide the original source of the money. Finally, the integration step would take place when the criminal sells the account for clean money.

According to Symantec, credit cards are the number one item being sold on underground servers, making up 28% of sales followed by bank accounts at 24%.[27] In a joint investigation with British newspaper the Independent and cybersecurity firm Sixgill, it was uncovered that Fortnite money laundering operations around the globe were being conducted in more than 5 countries.[28] Sixgill also found that Fortnite items made more than $250,000 on eBay over a 60-day period, but it is unclear how much criminals are profiting from the money laundering scheme.[29]

Because there are no government regulations in place to monitor or police money laundering through microtransactions and in-game currencies, it is currently up to the developers and companies to keep track of transactions and implement their own punishment systems. As discussed previously, Blizzard Entertainment monitors in-game transactions and flags suspicious in-game currency transactions. If the transaction proves to be illegitimate, Blizzard punishes the account by either confiscating the gold or banning it. No legal consequences occur because buying in-game currency online is not illegal, it’s just against the rules. This system applies to all individuals, not just ones who are laundering money. Blizzard’s system is not fool proof, as in-game currency transactions and buying gold online does not mean an account will automatically be flagged. Plenty of illicit transactions still slip through the cracks. Blizzard is just one example of a game publisher that does monitor its game transactions, However, there are many companies that do not, making these companies perfect targets for money launderers to clean their money.

To illustrate how a lack of laws and regulations allows criminals to launder money through microtransactions and in-game currencies, here is an example for each. If a criminal were to launder money through microtransactions, he or she could use stolen cards that he acquired through the Dark Web and use them to create an account on a free-to-play game such as Overwatch. From there, the criminal can buy loot boxes through a series of microtransactions and acquire valuable cosmetic appearances. The criminal could go as far as paying to have the account ranked up to increase the value before selling it for “clean money.” Because there are no laws or regulations about buying accounts from other people, only peer and company disapproval, this is an easy way for criminals to launder their money without government interference; there is no government involvement at all. If there was an algorithm that was able to track microtransactional purchases, in this instance for the loot boxes, it would flag and notify the company, which would then notify the government when a suspicious amount of loot boxes were being purchased.

If criminals were to launder money through in-game currencies, they could again use stolen cards and use these cards to create an account on a game such as World of Warcraft. From there, the criminals would go onto a currency selling website and buy the game currency. In World of Warcraft, the gold would be traded from the gold selling account to the buying account. Then, the account that purchased the gold would turn around and sell the gold or the account all together effectively making the money “clean money.” By having an algorithm that could identify and flag large gold transactions, Blizzard is already one step ahead of most other game companies, but there is no requirement for reporting to the government. It should be required that all game companies have to monitor in-game transactions and report any potentially illegal activity to the government for further investigation.

The United States should create a policy that makes it mandatory for companies to implement an anti-laundering algorithm or protocol to monitor and track microtransactions and in-game transactions that would be able to flag and notify the companies of potential criminal activity. After investigation, companies should then be required to report any potential criminal activity to the government for further investigation. In addition, criminal punishments must be decided for individuals who launder money through in-game currencies or microtransactions, or individuals who knew about the crime taking place rather than, at worst, simple account bans.

With new technological advances coming out daily, crimes will continue to advance as criminals look for new ways to commit their crimes. Money laundering through microtransactions and in-game currencies is still a relatively new idea that will only become a more popular method to launder money the longer that legislators’ heads are turned away. Implementation of regulations and policies as well as cooperation with international governments are necessary for any hope of battling money laundering through microtransactions and in-game currencies.

[1] Ann Mulligan & Sonal Dashani, Countering Cybercrime through Money Laundering Regimes (2016),

[2] Id.

[3] Omari Marian, Are Cryptocurrencies Super Tax Havens, 112 Mich. L. Rev. First Impressions 38 (2013).

[4] Kevin Horridge, How Money Laundering Really Works (Sept. 26, 2019),

[5] Id.

[6] Id.

[7] Id.

[8] Kevin Scura, Money Laundering, 50 AM. Crim. L. Rev. 1271, 1272 (2013).

[9] Id.

[10] Bank Secrecy Act, IRS, (Jun. 26, 2019),

[11] Id.

[12] See generally, National Money Laundering Strategy, (last visited Feb. 21, 2020).

[13] Id.

[14] 18 U.S.C. § 1030.

[15] Id.

[16] Kishan Mistry, P(l)aying to Win: Loot Boxes, Microtransaction Monetization, and A Proposal for Self-Regulation in the Video Game Industry, 71 Rutgers U. L. Rev. 537, 539 (2018).

[17] Eddie Makuch, Microtransactions, Explained: Here’s What You Need to Know (2018),

[18] Mistry, supra note 16, at 547.

[19] Erik Allison, Comment, The High Cost of Free-to-Play Games: Consumer Protection in the New Digital Playground, 70 SMU L. Rev. 449, 450-54 & n.1 (2017).

[20] Chelsea King, Note, Forcing Players to Walk the Plank: Why End User License Agreements Improperly Control Players’ Rights Regarding Microtransactions in Video Games, 58 WM. & Mary L. Rev. 1365, 1367 (2017); Yen-Shyang Tseng, Note, Governing Virtual Worlds: Interaction 2.0, 35 Wash. U. J. L. & Pol’y 547, 554 (2011).

[21] Paul Tassi, Study Says 69% of ‘Fortnite’ Players Spend Money on the Game, $85 Spent on Average (Jun. 26, 2018, 8:34 AM),

[22] Id.

[23] Id.

[24] See MDY Industries, LLC v. Blizzard Entertainment, Inc. 629 F.3d 928, 935 (2010).

[25] Steve Messner, How microtransactions and in-game currencies can be used to launder money (April 13, 2018),

[26] See generally, (last visited Feb. 21, 2020).

[27] § 9:1. Council of Europe MONEYVAL Report: Criminal Money Flows on the Internet: Methods, Trends and Multi-Stakeholder Counteraction (March 9, 2012); See also, G Data Whitepaper (2009): Underground Economy,

[28] Tamara Evdokimova, Criminals are using Fortnite to Launder Money (Jan. 24, 2019),

[29] Id.

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