2

Twitch streamer money laundering scheme results in police detaining 40 people -...

 2 years ago
source link: https://www.washingtonpost.com/video-games/2022/01/11/twitch-bit-money-laundering-turkey-police/
Go to the source link to view the article. You can view the picture content, updated content and better typesetting reading experience. If the link is broken, please click the button below to view the snapshot at that time.
neoserver,ios ssh client

Turkish police detain 40 people over Twitch streamer money laundering scheme

Listen to article
(The Washington Post illustration; Twitch; iStock)
January 11, 2022 at 9:05 a.m. EST

Turkish police detained 40 people last week in relation to an alleged money laundering scheme perpetrated on the streaming platform Twitch, the latest instance of a video game ecosystem being appropriated for purposes of fraud.

With over 9 million user-created channels, Twitch does not lack for nooks and crannies in which unsavory sorts — harassers, spammers and scammers — can hide. (The platform is owned by Amazon, whose founder, Jeff Bezos, owns The Washington Post.) Late last year, this became especially apparent when users mined payout data from an October 2021 Twitch hack and uncovered evidence of a Turkish money laundering ring that went through smaller, less visible streamers. Scammers would use stolen credit cards to donate Bits — a proprietary Twitch currency purchasable with real money — to streamers, who would in turn get paid in real money by Twitch and then return a substantial sum to scammers, while also pocketing a portion themselves.

Daily Sabah, a pro-government newspaper in Turkey, published a report on the law enforcement response last week, saying it was the culmination of operations in 11 of Turkey’s 81 provinces. Speaking to another Turkish publication, Sakinca, Turkish politician Gursel Tekin provided additional details.

Advertisement

“We learned that an operation was carried out against 44 suspects, including six children, in 11 provinces by the Istanbul Anti-Cyber ​​Crime Branch Directorate, and various individuals were detained,” said Tekin, a member of parliament and vice president of Turkey’s center-left Republican People’s Party.

Details about the arrests have been scarce. No exact figures around the money moved in the course of the scheme have been released, nor is there meaningful information about the status of the streamers implicated in the investigation. Meanwhile, popular narratives that have emerged in the wake of the arrests — chiefly, that Twitch only learned of the money laundering in October, and that the platform chose not to act — do not appear to be accurate.

The Post reached out to Turkish police and Tekin for further comment, but neither replied to questions about the money laundering investigation. Twitch also declined to comment.

Tekin, alongside prominent Turkish Twitch streamers, helped bring the money laundering scheme to the government’s attention by calling for a wider investigation in November. The scheme first appeared as a minor curiosity in leaked Twitch payout information. Smaller Turkish streamers were listed as cashing out anomalously large sums of money (up to $1,800 per day, despite viewer counts of just 40-50), which prompted users to take a closer look. They quickly discovered they weren’t dealing with just a few isolated cases, but instead potentially hundreds.

Advertisement

When news of the scheme initially broke last year, some streamers — many connected to the esports scene surrounding Riot Games’s popular competitive shooter “Valorant” — confessed to being involved, but also said they had been deceived into believing the money was legally obtained. In response, teams such as BBL Esports ended up cutting ties with numerous players. Riot Games pledged to investigate, while Twitch said in a statement that “in September alone, we took action against over 150 partners in Turkey for abuse of our monetization tools.”

Twitch maintains a small fraud team that had already been working on the issue for quite some time, according to an insider with knowledge of Twitch’s internal operations who requested anonymity because they were not authorized to speak to the media. This contradicts two narratives that have grown popular in the platform’s community: first, that Twitch, like everyone else, was alerted to the existence of Turkish money launderers by the October hack, and second, that it chose to sit on its hands when confronted with the problem. Additionally, while some publications and Twitch users have said that scammers collectively moved $10 million using this method, that number is only an estimate, born of some still-unsubstantiated accusations and payout data that some streamers deemed incomplete.

It is unclear how many, if any, streamers have been detained by Turkish police. The Post reached out to over 50 streamers accused by Twitch users of aiding money launderers to ask if they’d been raided or contacted by police. Only one, Alihan “deNc” Ipek, replied. Last year, Ipek admitted to being contacted by scammers but said he refused to play ball, prompting the scammer to donate Bits to his brother, “Valorant” pro Mehmet Yağız “cNed” Ipek, who confessed to pocketing the money without contacting Twitch. The two maintain their innocence, however, saying the Bits were donated against their wishes in an effort to make their channel activity seem fishy to Twitch, putting them at risk after they refused to comply with scammers. The streamers said scammers threatened to send a number of bits that would be flagged as suspicious by Twitch, possibly leading to suspensions or bans.

Advertisement

“The police didn’t contact me,” Ipek told The Post in a direct message. “I really don’t have much to do with these issues.”

In recent years, video games and platforms popular with gamers have become targets for scammers and fraudsters. Digital currencies in games like “Fortnite” and virtual items bought and sold on platforms like Steam have facilitated all manner of hustles, frequently through phishing schemes that trick users into giving up personal information with the promise of “free” goods. Fraud has also grown increasingly common, with cyber security firm Sixgill reporting in 2019 that criminals were using stolen credit cards to purchase V-Bucks — “Fortnite’s” in-game currency — and then selling them to players at a discounted rate, “cleaning” the money of evidence of its illicit origins. That same year, Valve overhauled “keys,” a cornerstone of “Counter-Strike: Global Offensive’s” digital goods system, after the video game developer learned that “nearly all key purchases that end up being traded or sold on the marketplace are believed to be fraud-sourced.”

Money laundering experts say that games and platforms with alternative currencies have grown increasingly appealing to fraudsters, especially in light of inconsistent regulations and classifications applied to them in the United States.

Advertisement

“Investigators are already overwhelmed with the billions of dollars stolen by fraudsters from the Paycheck Protection Program,” said Moyara Ruehsen, director of the Financial Crimes Management Program at The Middlebury Institute of International Studies at Monterey in Vermont. “They have no time to investigate video gaming sites for money laundering activity.”

Anton Moyseyenko, a lecturer at the ANU College of Law in Australia who co-wrote a 2019 report on money laundering in games, said it appears that games and and related services are mostly being used for smaller-scale forms of fraud as opposed to more sophisticated operations.

“There are no doubt opportunities for money laundering in online games, but for the most part they are limited to the use of stolen bank card details, which is precisely what we are seeing here,” Moyseyenko said. “If you have a stolen bank card, you want to convert that into cash. As a result, criminals are drawn to anything that can be bought online and then re-sold. Online games are an avenue for that kind of money laundering, but generally speaking not money laundering in the sense of moving millions of dollars’ worth of proceeds of drug trafficking, corruption or other crimes, as is the case with the financial or other high-risk sectors.”

Advertisement

Still, games present a myriad of opportunities for financial crimes to slip through the cracks.

“How do you know if someone is purchasing in-game items for more than what they’re reasonably worth?” Ruehsen asked. “If I want to move $10,000 to my criminal associate, I could buy 1,000 in-game items for $10 more than what they’re worth. Maybe that would be easy to spot. But if you have other criminal associates conspiring with you, they might ‘participate’ in an auction to push up the price to something crazy, thereby making it easier to explain the higher price. That’s more difficult to spot.”

Unlike “Counter-Strike” and other games tied to digital market functionality, Twitch’s currency can only be transferred directly from viewers to streamers as payment for broadcasts, not specific digital goods. Still, this is not the first time the platform has been used for fraud. It’s unlikely to be the last.

Advertisement

Tekin hopes to see swifter crackdowns from all parties involved in the future.

“I would like to thank our young people who have been following the issue carefully from the very beginning, who warned all decision makers and let us take care of the issue," he said. "From now on, the government should take the necessary action, ensure that the American government is also focused on the issue, and prevent this platform from becoming a tool for money laundering.”

Kareem Fahim and Zeynep Karatas contributed reporting from Istanbul.


About Joyk


Aggregate valuable and interesting links.
Joyk means Joy of geeK