Virtual Worlds: Such a Light Side, can we ignore the potential Dark?

Recently I had the pleasure of being interviewed on Radio 5 Live by Chris Valance regarding the possibility of Money Laundering in Virtual Worlds, an interview in which Steven Philippsohn, Chairman of the Fraud Advisory Panel’s Cyber crime Working Group also contributed. The Working groups recent press statement here, makes for an interesting read, and is based apparently on TRMG’s discusssion paper (which Roderick kindly posted a link too).

I’ll just draw attention to one sentence in the Fraud Advisory Panel’s statement:

Mr Philippsohn added: “The legitimate benefits of virtual communities will prove enormous but people need to be aware that this cutting edge technology has a darker side.”

I think this neatly surmises what a number of individuals are currently concerned about. Much like the internet itself, Virtual Worlds have been started with the best of intentions, wonderful interactive playgrounds to fulfil either our needs for fantasy gaming (with such games as World Of Warcraft) or interesting Virtual third-spaces to allow and facilitate social networking (Second Life), yet, again, very much like the internet itself, as it grows, and as more and more people become involved, a darker potential side emerges. I remember a day when I checked my e-mail without being worried about trapped password stealing mail, and I remember a day when the idea of cruising around the internet using Firefox (with full security add-ons), a top of the line Firewall, a Ad-Aware, AVG and Spybot-Search and Destroy all installed would have been called paranoid; not sensible and normal.

As with many people, I both enjoy these virtual worlds, but I cannot ignore the potential for misuse. And I’ll be clear on that word; potential. Certainly evidence of misuse in terms of both criminal activity and money-laundering is either very limited, hypothetical and mis/over-stated by a number of media sources at the moment. But it would be remiss of us to ignore it.

In terms of money-laundering (an area of criminal activity I intend to be examining on this blog) the first tentitive steps which need to be made are clear; we need a typology. We should not however ignore what has gone before, as certainly a lot of ground-work has already been laid in this area. The Financial Action Task Force’s examination of the methods of Money Laundering provide us with an excellent starting point, and I highly recommend reading their publications on Trade Based Money Laundering, their most recent publication on typologies, their examination of new payment methods and their most recent publication on complex money laundering methods to anyone who is even remotely interested in this area.

The development of a typology (work I’m currently undertaking with help with my colleague Dr Jackie Harvey, a much published expert in the field of ML) is critical for identifying the key “pressure points” within a potential money Laundering system, allowing for Anti-Money Laundering (AML) activities to be focused on the approipriate mechanisms and facilitators.

Certainly the Money Laundering activities which could take place within virtual worlds are diverse, indeed, just on this Blog, from his comments I know that Roderick is mainly concerned about the potential for virtual worlds to be used as an Alternate Remittence System (ARS) for terrorist or criminal activity; The potential of perhaps terrorists to transfer money from low banking security countries to high banking security countries for example. While myself, I see Trade Based Money Laundering in Virtual Currencies as the area which might be of greatest concern to lawmakers and enforcement agencies in coming years.

All of these areas deserve attention, as while we may be enjoying the “light side” of these virtual worlds, to ignore the potential of the darker side would be ignoring the lessons that history has taught us again and again regarding criminal behaviours.

Remember the last time you opened an attachment to an e-mail without checking it thoughly first? thought not. The “age of innocence” for the internet was short-lived once the mass-market became more interested in the late 1990’s. Perhaps similarly the innocence of virtual worlds should be reflected upon.

As a final word, many thanks to Roderick for inviting me to contribute to this Blog, and I look forward to posting discussions on a regular basis, with this Blog hopefully becoming a good portal for those interested in the issue of MetaSecurity.

David Grundy