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Crime Australia Security Your Rights Online

Aussie Police Probe Virtual Worlds For Money Trail 87

Posted by samzenpus from the follow-the-gold-farmers dept.
schliz writes "Australian law enforcement has flagged virtual worlds as a 'growing area of interest' in its fight against money laundering and cybercrime. Police are reportedly investigating unnamed virtual worlds, as well as online money transfer services such as e-gold and Hawala/Hundi."
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Aussie Police Probe Virtual Worlds For Money Trail More

Aussie Police Probe Virtual Worlds For Money Trail

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  • nosuch (Score:1, Insightful)

    by Anonymous Coward

    There is no such thing as money laundering, only the claim that big government has a right to know how you spend your money.

    • Re: (Score:1)

      by Anonymous Coward

      Well, unless what you claim is your money is actually someone else's money that you got through illegal activity such as extortion or robbery. For details, look up how Al Capone was taken down.

    • Re: (Score:2)

      by DrXym ( 126579 )

      There is no such thing as money laundering, only the claim that big government has a right to know how you spend your money.

      Actually there is such a thing as money laundering. It where you illegally obtain money or financial instruments and then attempt to legitimize how you appeared to obtain that money. It's also quite obvious why "big government" would wish to have measures to detect it - the prevention of crime, the means to seize the proceeds of crime and for tax audits.

      • There is no such thing as crime, only the claim that big government has a right to know how many dead hookers are in your trunk.

    • There is no such thing as money laundering, only the claim that big government has a right to know how you spend your money.

      So society has no right to protect itself from criminals?

  • Bit Coins? (Score:5, Interesting)

    by VortexCortex ( 1117377 ) <VortexCortex@Nos ... t-retrograde.com> on Monday March 28, 2011 @02:17AM (#35635974)

    I wonder how hard it is to track Bitcoin [weusecoins.com] laundering considering that each wallet has over 100 different keys it can use in any given transaction...

    From the Bitcoin FAQ [weusecoins.com]:

    Bitcoin transactions need to be public, so that every client can confirm what account has how much money available. However since accounts are just numbers, it's very hard to figure out what is behind each individual transaction. Here is an example for a Bitcoin transaction:

    IN: 1NqwGDRi9Gs4xm1BmPnGeMwgz1CowP6CeQ: 25.09
    OUT: 1GZZUd25jbDpUghYD1EA3URdtbzobedqWr: 25.09

    As you can see, the transaction only includes the Bitcoin addresses involved which by themselves don't tell you much at all. Every Bitcoin wallet contains a hundred or more addresses, which makes associating users with their wallets even more difficult.

    So, I guess some sort of massive transaction "mining" operation would be needed in order to make a correlation between the keys / account holders. Launderers: get started now while transactions are still free!

    • How about tracking funding through Project Entropia: http://www.entropiauniverse.com/ [entropiauniverse.com]
      • Good idea. As dead as the market is, there can only be launderers left in that game. Wasn't there even an Aussie allegedly evading taxes?

    • If only there were some way for government to eavesdrop on Internet communications.

      • Re: (Score:1)

        by genjix ( 959457 )

        It is possible to run Bitcoin through Freenet. There's even a project underway to do that.

    • Re: (Score:2)

      by DrXym ( 126579 )

      I wonder how hard it is to track Bitcoin [weusecoins.com] laundering considering that each wallet has over 100 different keys it can use in any given transaction...

      Send me some bitcoins on 13jvPmUNSjXFvw5dUTTBS116UghJJi438s and I'll tell you.

    • What is money "laundering" except the removal of the value from the view of someone outside the transaction? Who is outside the transaction that does not want to be excluded? The banks that issue and utilize the money they have the positive "right" to create exclusively. Real money does not have a bank attached to it, or a government, or a positive right associated with it's creation and/or distribution. If laundering money is a crime, you have to ask yourself who the victim of this crime is. It is no

  • A little late? (Score:4, Informative)

    by Compaqt ( 1758360 ) on Monday March 28, 2011 @02:26AM (#35636008) Homepage

    This [wikipedia.org] seems to say that e-gold was shut down by the authorities (the ones that make it illegal to keep secrets from them, but also illegal to publicize their secrets), and all they're doing now is trying to get people's money back in some way or another.

    Sidenote:

    Beginning January 2006, eBay has restricted buyers and sellers from using many online payment systems and encouraged them to use Paypal, ... owned by eBay. ... eBay cited e-gold's policy of non-reversible transactions as a detriment to the buyer experience.[26]

    Non-reversible is good. Are payment processors supposed to be modes of payment, or net-nannies? If anything, non-reversible would mean fewer problems as people won't buy from anything other than reputable stores.

    • Re: (Score:1)

      by Anonymous Coward

      Non-reversible is good. Are payment processors supposed to be modes of payment, or net-nannies? If anything, non-reversible would mean fewer problems as people won't buy from anything other than reputable stores.

      Please sir! I am having 10,000,000 USD in bank account of Nigerian Prince and am needing your help to withdraw funds out of country. Please be wiring to me 100$ by wire-transfer to arrange the transportations of your moneys to an account of your choosing. I am very reputable person and promise to give money back if not 100% satisfied.

      • Re: (Score:1, Offtopic)

        by Americium ( 1343605 )
        And almost all of those scams start with them giving you a REVERSIBLE payment. Because that first payment is REVERSIBLE, you send them their portion, which happens to go through. Remove their payment getting reversed, and the scam is removed.

      • Ha ha. Anyway, again, the point stands: Is PayPal supposed allow you to pay, or is it supposed to be your "pal"? I guess they couldn't decide, so they named it both.

        Either only send money to people you know (personally or professionally), or use only reputable vendors (Amazon, Sears, whatever).

        If you send a check to someone, and they don't send you what you expected, do you expect your bank to handhold you through the process of getting fair value back?

    • I agree E-gold with non-reversible transactions would be great. What would be much better is if capital gains taxes on gold were eliminated, thereby elimination the need of records of every transaction along with calculations and taxes incurred, sent to the government and kept on record. Until that happens, I don't see Gold being able to give us what it's can, monetary freedom, which is actually is large part of freedom.

      • Without the audit trail, you are proposing what, exactly? That we physically transport gold to each other? That the amount of gold we own is represented by a single entry in a database with no evidence to back it up in case of malfunction/dispute? Who protects this gold and the systems surrounding it?

        Since we are eliminating reversibility and record-keeping, I look forward to working for your bank and transferring your balance to my account. That is monetary freedom, which is actually a large part of freedo

        • I don't think the GP is advocating an end to record-keeping in general. The problem is specifically with the need to maintain tax records tracking IRS-acceptable market valuations (in US$) every time you make a deposit, withdrawal, or transfer. Imagine, for a moment, that every time you moved US$ into or out of your (US$) bank account you had to come up with an IRS-acceptable valuation of that money in units of Euros, or grams of gold, or whatever, and not only report this to the IRS but also keep it on fil

        • I just meant the trail isn't kept by the government. Private companies keeping their OWN paper trails to conduct business is fine with me. By freedom, I mean't my bank account can't be undermined by inflation, and lose 50% or more of it's value over my lifetime.

          • The government gets the trail only by following a particular legislatively approved procedure. What I think you're asking for is a change in the list of occasions where the procedure is applicable. There are times, such as criminal investigation of people trafficking (that's newspeak for "slavery"), where surely you see that it is reasonable for the police to investigate the flow of money. AML isn't just about tax evasion and drugs money.

            As for inflation, you're assuming that the supply of gold remains cons

            • You missed the point, the Capital Gains Tax on gold makes every transaction, every time you sell gold for dollars to make a purchase, every time you transact in gold, if the price of gold went up, you need to report those capital gains to the government and pay 15% taxes on those gains. Therefore, every transaction is required to be recorded and sent with appropriate forms to the government, every single legal transaction every time the price of gold goes up from the date you originally purchased it. It ma

              • Synthesis of gold? I mean besides neutron absorption (billions of times more expensive than mining), that technology seems extremely far off. By the time that occurs, I assume everything will basically be free, and I won't be working. Creating gold from other elements may likely come far after molecular and atomic 3d printers are available. If that's the case, I could already print anything I desire.

                Deflation is the entire point of a growing economy, my wages and savings gain value, and everything is cheap

              • It makes using gold as money infinitely more complex

                We have computers now. Record-keeping makes using gold as money very slightly more complex - and can be done by the guy actually holding the gold on your behalf. (Unless you propose trading by physically exchanging chunks of gold, which I hope you don't.)

                and for the most part uncontrolled by governments

                For the most part. [chestofbooks.com]

                Hording is a problem, but most people will just leave it in banks

                Leaving in bank = hoarding, assuming that you're eliminating fractional reserve banking (and that by "leaving in bank" you didn't mean "investing").

                hording is more a problem now since people don't trust paper dollars to keep their value.

                Inflation tends to increase spending and borrowing.

                • You seem to not be concerned that the government would need records of every transaction you make, odd, and one of the reasons the income tax is so invasive already.

                  Mines opening and closing is usually not controlled by governments. Gold stored in central banks would be part of the money supply, and since the governments never just destroy their gold, it doesn't influence the supply at all. They influence supply through regulations and permits for gold mining.

                  Even with fractional reserve banking removed, a

    • eBay cited e-gold's policy of non-reversible transactions as a detriment to the buyer experience.[26]

      eBay *loves* buyers who can 'buy' your stuff then reverse the transaction right after receive it.

      • Thing is: either be a payment service,
        - or -
        be a "pal" (i.e., escrow service). Not both.

        Trying to be both is what is making them do both tasks badly.

        By the way, what is Amazon's exchange policy? (I've never needed to return stuff--can you just return stuff because you want to, and they'll take it?)

      • Re: (Score:2)

        by Tuoqui ( 1091447 )

        Even cheques are reversable... Why do you think most companies only take cheques with 2 forms of ID. It's so they can get you in court if you screw them over.

        Ofcourse they are also reversable so that if say the merchant does something like add a 1 infront of78.28 you can reverse it as the fraud it is.

    • Non-reversible is good.

      Non reversible is bad. Non reversible means the payee has no rights and no recourse after payment is made if the services or goods paid for are not provided or turn out to be faulty. (Or at a minimum, it means exercising those legally protected rights becomes more difficult.)

      Are payment processors supposed to be modes of payment, or net-nannies? If anything, non-reversible would mean fewer problems as people won't buy from anything other than reputable stores.

      Payment process

      • I agree with you in the sense there's no rhyme or reason for Paypal to hold your money for 180 days "for your protection".

        But banks don't hold your hand when you send money to someone by mistake. It's caveat emptor.

        I agree that no processor should be able to take your money and then not reverse that transaction, but I'm talking about where you send money, and then change your mind.

        • But banks don't hold your hand when you send money to someone by mistake. It's caveat emptor.

          You can cancel checks - and you can reverse credit card charges. So no, it's not caveat emptor. Being able to reverse transactions is not the same thing as holding you hand.

          I agree that no processor should be able to take your money and then not reverse that transaction, but I'm talking about where you send money, and then change your mind.

          The problem is, under the law and in certain circumstances, I'm all

          • Try canceling a cash payment.

            Non-Reversible is good and already exists, it just doesn't have a commonplace existence electronically yet.

  • What Second Life does (Score:1)

    by Anonymous Coward
    Money laundering through Second Life isn't very effective since all transaction history is kept for at least 30 days (but is much longer than this, this is just user accessible) [secondlife.com]. You can only withdraw your credit (exchange for US$) by wire transfer or PayPal [secondlife.com], not only that but they have a Risk API [secondlife.com] to determine the risk of a real-world transaction which must also be used for any third party L$ exchanges. The paper trail is there, it's not difficult to reach if you're law enforcement, it's called a subpoena.

    • Re: (Score:2)

      by DrXym ( 126579 )
      It is effective in the sense that you pay money to one service, transfer it virtually and redeem it on the other side through another account. At the very least this would cause jurisdictional hassle as you try and obtain court orders to look at those records.

      • your problem comes from the limits involved in amounts transfered. as a non paid member you are severely limited as to how much money you can have in your account.
        Even if you are a paid member you can't have a lot of money until your account is a bit older.

        And any very large amounts for a new member will trigger the anti fraud stops. (hint if you want to be Lady Heather in SL you will have to be a member for a couple months at least and adult verified and have payment info on file)

        • Re: (Score:2)

          by DrXym ( 126579 )
          For Second Life replace with any game where you can virtualize currency and retrieve it on the other side. Personally I think there must be better ways to launder money.
          • The sheer *amount* of virtual currency would raise suspicion. If you're routinely tradeing the equivilent of tens of thousands of dollars in real money at grey market rates, the administrators will notice. They'd probably assume you were running a gold-farming operation.

            • Re: (Score:2)

              by DrXym ( 126579 )
              Gold farming is something else again, e.g. I pay 10 people to sit there and grind out for items which I then covertly sell to other players through secret means. As far as the game is concerned they just have 10 subscribers. They'd have to actually what the subs are doing to detect farming. I guess a farming operation could be used to launder money but not very easily unless you had 100 people all playing so that their sub & wages was equivalent to the amount of money you wanted to launder..
              • Time online is a good indicator. A major expense for a gold farmer is subscription cost, so he'll want to work them all to maximum profit. That means characters being operated for as many hours as possible a day, even if it means very long working hours or operating in shifts. If the game operator sees a character is active for twenty hours a day, seven days a week, then it's a fair bet it's being used by more than one person.

                Another indicator, and one which would detect money laundering too, would be th

  • ... how many polices is the editor talking about which probe virtual worlds for money trail(s)? Or perhaps they (in the 3rd person singular sense of "they") meant to write "Aussie Police Probes ..."

    Or maybe they're discussing some police probe based virtual worlds in which the communities are collectively in favour of a particular money trail?

    I'm not a native English speaker, so I might be wrong in pointing out that there is a problem here. But I don't think I am.

    • Re: (Score:2)

      by dbIII ( 701233 )
      It's the Australian Federal Police cybercrime unit so it's just a guy named Barry and the trainee Tim. The other two in the unit are trying to catch pedophiles and online fraud.
      I'm joking but staff levels are about that low despite it being for an entire country.

    • I'm not a native English speaker

      True, but you may be a native American speaker. The US have this habit of regarding organisations as persons in their own right. British English recognises that organisation = group of people. Plural.

      • Re: (Score:2)

        by cromar ( 1103585 )
        It's a bit more complicated than that. In American English, "the police" is a plural noun. Whereas, "the police department" is a singular noun.
  • Shouldn't it be enough to check bank money transfer and credit cards?
    Or do they think the bad guys can get real money from virtual worlds in some other way?

    • I guess it must be another tool for profiling money laundering against legal behaviour.

      For example, you may really be doing bussiness in virtual currency (selling plugins or whatever you can sell there, playing 24x7 and converting your gold for $, etc.) and getting, let's say, 1000$ a month. Or maybe you just sell auction a rock and "someone" buys it for the equivalent of 1000$. The money transfer only shows the 1000$ that you get.

  • This will not end well and is entirely the gaming industries fault. They should have never allowed real money for virtual items in their games, but they were too damned greedy. Eventually I expect them to consider the entire RMT world as nothing more than online gambling (which is what it actually is) and to either outlaw it completely or levy exorbitant taxes on the industry.

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