Bank Theft Highlights Downside Of Virtual Currencies

OTS red tape regulation

Virtual currency is turning into a multi-billion dollar economy, and much of that money sits in virtual banks that exist outside normal government regulation.

So what happens when fraudsters wake up to the laissez-faire virtual economy?

And worse, what if the one of those fraudsters happens to be the bank CEO?

Something bad is what happens.

Reuters has the blow by blow of the recent news that the CEO of a bank in the game EVE Online stole $5100 from his depositors in order to pay some real world debts.

Ricdic, the CEO’s character in the game, “embezzled about 200 billion interstellar kredits,” from EBank, the largest player-run bank in the game. Richard, the 27 year old man behind Ricdic, used the cash to pay for a house and medical bills for his family. He was kicked out of the game, but not for the reason you think.

Stealing money from other players? No. Committing fraud or crossing a, ha, regulator? Nope.

He was tossed from EVE because he sold the stolen kredits to another player, in exchange for the real world money.

“We have never seen ourselves as gods who make the rules of social interaction,” said Eyjolfur Gudmundsson, an economics adviser to CCP. “You are able to lose the things you have created. That’s what makes the world interesting.”

Richard lives in Australia, the game was developed in Iceland, and the 300,000 players who play live all over the world. That would make the chances of a meatspace prosection pretty unlikely.

The whole thing is troubling because billions of real dollars are now flowing through online games and banks and goods and services as virtual money

As we noted, many big companies are getting into the act, including Facebook. What happens when and if someone figures out how to embezzle other users’ money on that website?

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