Virtual Worlds Prove Fertile Ground for Cybercriminals

CybercrimeAfter looking at the necessity of proper policing in virtual worlds yesterday, let's take a look at just how prevalent cybercrime really is.

As the Hindu Business Line reports, cybercrime –
both small-scale phishing and large-scale acts like cyberterrorism and mass
account information theft – is on the rise.

The Profit Potential of Virtual Crime

Cybercrime’s prevalence in the virtual world is debatable,
with different organizations expressing varying levels of concern. The
Fraud Advisory Panel, a consumer protection group, called for the extension
of federal laws into the virtual world as earl
y as 2007.

There’s definitely a need, reports
the the Hindu Business Line
, a business policy newspaper that recently
dipped into the virtual world to take a sampling of cybercrime.

From the article:

Phishing attempts
to acquire sensitive consumer information such as usernames, passwords, and
credit card details fraudulently. Once an account is compromised in this way, a
cyber criminal can empty it or use its associated credit card information for
other purchases.

While not a
threat in the usual sense, users can inadvertantly become party to money
laundering. Because avatars can trade currencies and goods inside the virtual
world and then sell them into secondary markets for real money, the crime is
difficult to trace.

We've come a long way from trying to trade useless
loot for gold in Runescape. Money laundering through Second Life's Lindex
Exchange, which allows users to spend real currency for Linden Dollars and then
convert them back into a real world currency, is also a potential financial
fraud hub.

In fact, money laundering on the Lindex was a hot topic in
early 2008
, causing the company to take a strong stand in defense of its
platform. However, these concerns require further investigation, as the ease
with which a player can convert currencies – which requires only a computer and
a Second Life account – raises
serious anti-terrorism concerns

As virtual worlds grow in scale and in the number
of financial transactions conducted daily, cybercriminals are growing in
tandem. With no standardization between worlds, there is no way of knowing
whether one source is making and cashing out Linden Dollars, Warcraft Gold, or
any other in-game currency. This makes tracking accusations of money
laundering extremely difficult.

As virtual worlds grow larger and become a part of
tens of millions of lives, the security of one's virtual identity will come to
the fore. Trading game currency and betting
real currency on in-game markets
has birthed an emerging, if impromptu,
stock market.

Speculators discontent with the ravaged real-world
market will no doubt turn to virtual worlds as they become viable. Without any
virtual Securities and Exchange Commission to test the legitimacy of
"virtual stock" promotions, this leaves well-meaning players open to

Despite how common e-mail phishing scams may seem (and who doesn't have a fake PayPal or eBay "account verification" e-mail in their inbox from the past month?), it is vital to remember that these are crimes.

One of the major problems facing law enforcement agencies is the issue of where an attack originates. This decides the thorny issue of jurisdiction.

Internet security firms like McAfee decry the current scam-ridden landscape of virtual worlds, but substantive recommendations for improving the situation are few and far between. As Tech Target reports, the ever-expanding virtual landscape and the cleverness of cybercriminals is confounding traditional law-enforcement services.

Given the cost of cybercrime and its potential to destabilize small virtual worlds that may lack superior protections, being confounded is no longer good enough. Law enforcement agencies need to give serious consideration to the major role virtual worlds are playing in the lives of users – both as hubs for financial transactions with sensitive credit card information, and as a center for semi-anonymous gathering.

Should law enforcement agencies monitor virtual worlds for cybercrime and identity theft? Is it time for the FBI to open a virtual office in Second Life to deal with claims of large-scale cybercrime events? Let us know your thoughts.

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