Dirty Money, Skins, And Gambling: Money Laundering In Video Games

For thousands of years, criminals have needed to inject money from illegal activities into the economy. It is speculated that this practice has reached the world of video games, where items and skins on secondary marketplaces are used to launder money. But is this really the case? And if so, how can money laundering be identified? Here’s a study that explores these questions.

"Since the beginning of crime as a means of producing income, and the creation of functional marketplaces, there has been a need for criminals to find an avenue to clean proceeds of crime in a way which masks the origin of the funds. This is a way to allow the spending of proceeds of crime in a way that is practically indistinguishable from legitimate earnings." [1]

Over 3,000 years ago in China, the earliest known records of money laundering were created. Until governments became concerned about the rise of drug trafficking and its impact on economies and public health, money laundering received little attention. In the following decades, its scope was broadened to cover most serious crimes. Especially after the 9/11 attacks in 2001, regulations were tightened further to prevent terrorism financing. Today, it is estimated that money laundering makes up between 2–5% of the world’s GDP.

But what does this have to do with video games? Well, video games—particularly their secondary markets—offer criminals potential avenues to launder money. On these markets (e.g., unofficial websites), players can buy in‑game skins, currencies, and items with their hard‑earned EUR, USD, or whatever currency they use. For instance, EVE Online doesn’t have an official platform for buying or selling items, yet multiple secondary websites exist. The same applies to Counter‑Strike.

The problem worsens when gambling websites are involved. If gambling isn’t the first thing that comes to mind when you think about a CS tournament, then you may have missed the phenomenon entirely over the past five years.

However, until recently, it was only speculated whether money laundering actually occurs in this space. To obtain a clearer picture, researchers from the featured study analyzed Counter‑Strike trading data from Steam over a five‑day period, recording a total of 1,108,199 trades.

"The aim of this investigation was to... possible suspicious transactions that would require further investigation." [1]

How do you do that? Traditional automated money laundering detection systems try to identify irregularities in the frequencies and value of transactions. For instance, if one of a small group of accounts have a high trading frequency trading a particular product or item... there may be something going on.

🧺 Is The Money Clean Yet?

There was one item (4,632) that was traded 71,327 times within five days, amounting to 14.1% of all trades on the platform. "All the top 10 most commonly traded items made up 74.9 % of all traded items." [1]

The most active trader completed 6,565 trades within five days... That’s 81.25 trades per hour (16 hours of trading per day), accounting for 1.3% of all platform trades. The second‑most frequent trader accounted for 0.5%. Altogether, the top 10 traders (0.002% of users) conducted 4.5% of all platform trades. Clearly, this is far from normal and warrants further investigation—exactly as the authors concluded.

Additionally, there appeared to be a network of account who buy and sell to each other in high frequency, making it even more likely that something fishy is going on, screaming "money laundering".

The researchers also pointed out that the traditional money laundering identifiers they have used appear to work in the cyber realm as well.

Hope you enjoyed the episode. Best,

Christian 🙂

References

[1] Cooke, & Marshall, 2024