Are the financial transactions conducted inside virtual environments truly anonymous? An experimental research from an Australian perspective.

Abstract

This paper examines the identity and payment method verification procedures implemented by a number of popular massively multiplayer online games (MMOGs) and online financial service providers (OFSPs) to determine if the systems they currently have in place are sufficient to uncover the identities of those who may wish to use such environments to conduct money laundering or terrorism financing activity. The paper also investigates whether the payment instruments or methods used by account holders to place funds into their account(s) hinder or assist investigators to expose the real-world identity of the account holder. The paper then discusses whether it is feasible and/or desirable to introduce know your customer (KYC) and customer due diligence (CDD) legislation into virtual environments and illustrates an effective KYC approach which may assist MMOGs and OFSPs to correctly identify their account holders, should legislation be put in place.