We’ve heard many times that one of the main uses of Bitcoin was for money laundering. Well, a study has been done noting that is very much so true, and it’s not for activities you may think.
While many think of money laundering being an activity associated with hiding drug money, in the world of cryptos, the activity is increasingly being done to convert stolen gains into video game currency.
So is the finding by cybercrimes platform Bromium, which recently announced the completion of a study in which in reviewed how criminals were using virtual currencies in money laundering activities.
While the report won’t be released in its entirety until next month, Bromium has shared some of its findings.
We note them here.
Gaming and money laundering
In its findings, Bromium says that virtual currencies have not just become a tool used by cybercriminals for money laundering, but the primary tool. As noted above, this is especially the case when it comes to the area of gaming.
The report indicates that cybercriminals are spending “considerable time” converting stolen income into video game currency or in-game items like gold, which are then converted into Bitcoin or other electronic formats.
Games of choice seem to be Minecraft, FIFA, World of Warcraft, Final Fantasy, Star Wars Online and GTA 5. According to Bromium, these are among the most popular options because they allow covert interactions with other players that allow for the trade of currency and goods.
Dr. Mike McGuire, a senior lecturer in Criminology at Surrey University, England, is presenting these findings at a conference to be held in April. In this summary, he’s quoted as saying:
“Gaming currencies and items that can be easily converted and moved across borders offer an attractive prospect to cybercriminals. This trend appears to be particularly prevalent in countries like South Korea and China – with South Korean police arresting a gang transferring $38 million laundered in Korean games, back to China. The advice on how to do this is readily available online and explains how cybercriminals can launder proceeds through both in-game currencies and goods.”
How is it done?
To complete their illegal transactions, money launderers using cryptos don’t make the transactions all at the same time. Instead, their activities often involve the use of “micro-laundering” techniques where multiple, small payments are made so laundering limits aren’t triggered, according to Bromium.
It appears that PayPal is among the digital payment systems mainly used by cybercriminals to launder money, according to Bromium.
The crypto of choice
Like others have found, Bromium found that cybercriminals are moving away from Bitcoin to less recognized virtual currencies, like Monero. This is largely due to these cryptos offering more anonymity.
We told you in January that Rob Wainwright, Europol's Executive Director, thought that criminals were abandoning Bitcoin in favor of cryptos that were more difficult to trace. During our January reporting, we noted the following statement from Daniele Bianchi, an assistant professor of finance at Warwick Business School.
“The fact that Bitcoin is constantly in the spotlight makes it more valuable for investors, but certainly less valuable for its earliest fans — criminals — giving rise to interest in other alternative cryptos designed to avoid tracking.”
The damage
According to the report, the money cybercriminals make off with from their illegal activities is significant. It’s estimated that their profits make up 8% to 10% of total illegal profits laundered globally. That amounts to roughly $80 billion to $200 billion a year.
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