CS:GO Money Laundering Shut Down by Game Publisher Valve Corp

Posted on: November 5, 2019, 04:31h. 

Last updated on: November 5, 2019, 04:56h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Counter Strike: Global Offensive publisher Valve Corporation said this week it pulled the plug on money-laundering activity that had been occurring through its microtransaction system.

The Bellevue, Washington-based games giant acknowledged in a statement that criminals had been “liquidating gains” through the trading of digital keys that are used in CS:GO to open loot-boxes. Keys can be purchased within the game and — until this week — bought and sold on Valve’s Steam platform.

Because the keys have a relatively stable monetary value, they are ideal tokens for trading. But it’s clear the system was being exploited – likely by criminals looking to launder the proceeds of credit card fraud, although Valve did not go into detail about the nature of the crimes it had uncovered.

However, the company said this week that “stopping criminals was more important than its microtransaction system” and that the ability to trade keys would be suspended immediately.

In the past, most key trades we observed were between legitimate customers. However, worldwide fraud networks have recently shifted to using CS:GO keys to liquidate their gains,” said Valve.

“At this point, nearly all key purchases that end up being traded or sold on the marketplace are believed to be fraud-sourced,” it added. “As a result, we have decided that newly purchased keys will not be tradeable or marketable.”

Skins Gambling Scandal

Valve’s actions have been more decisive than in 2016, when the company faced criticism over the third-party gambling sites that had grown up around the trading of “skins” – colorful designer weapons attainable through loots boxes in CS:GO.

Like keys, skins are also traded on the Steam platform, but can be transferred to third-party sites, although this is a violation of Valve’s terms and conditions.

Because skins are found within the game with differing degrees of rarity, they can be ascribed differing monetary values and gambled with as a virtual currency — on lottery and roulette-style games, as well as on the outcomes of esports matches.

$5 Billion Industry

Around 2015, skins gambling exploded into a $5 billion industry, by one estimation – and a large proportion of its players were undoubtedly minors.

Valve was slow to react, initially suggesting skins gambling was neither its creation or its problem. It only acted once the lawsuits accusing it of facilitating underage gambling started to pile up.

Many shut down in response. But it’s unclear exactly how effective Valve’s clampdown has been. A quick Google search reveals that unregulated skins gambling appears to be alive and well in 2019.