Criminals prefer free-to-play software applications to launder money over crypto

[Hydrogen]

Digital Laundry: how credit card thieves use free-to-play apps to launder their ill-gotten gains

"If you have ever played a free-to-play game you know that most of them require resources of one type or another to play. Whether it be gems, gold, power ups, or other, these resources are required to advance within the game, making them critical to the game play. Manually gathering the free resources is a slow process and one can play a game for months working to move up levels.

This is where the game makers make their money. They sell resources through “In-App Purchases” to help people play the game and speed up the game play. The lure of speeding up your play is a strong incentive to spend money on resources, and many spend to play. This has turned free-to-play games into a multi-billion dollar industry.

The resources even maintain value after purchase, because in many cases, once bought, they can be traded, adding to the game play.  The game itself can also be transferred from one account to another. Because of this, resources gathered or bought and games built to advanced levels can also be resold.  It is the selling of these on third party markets that holds the door open to the illicit activity that we found taking place.

Alexander Kernishniuk, Communications director, Kromtech:

"Money laundering through the Apple AppStore or Google Play isn’t a new idea and has been done before.  In the 2011 the Danish part of the Apple App Store was flooded with expensive suspicious applications. More than 20 out of 25 of the most downloaded applications were from China. The price of the apps ranged from $50-$100. For example, one of them “LettersTeach”, was intended for children who are learning English letters, yet it cost nearly $78.  This pointed to money laundering then, however, what we encountered now is much more sophisticated.

What did we find?
Following our MongoDB investigations and honey pots deployments from the beginning of this year, we did another round of security audit of unprotected MongoDB instances. In June 2018 we have spotted a strange database publicly exposed to the public internet (no password / login required) along with a large number of credit card numbers and personal information inside.

As we examined the database we rapidly became aware that this was not your ordinary corporate database, this database appeared to belong to credit card thieves (commonly known as carders) and that it was relatively new, only a few months old. So we dug much deeper.

It appeared to be a group of malicious actors with a complex automated system utilizing free-to-play apps, third party game and resource resale websites, and Facebook to launder money from stolen credit cards.

In one of the tables we found links to Facebook accounts. From those accounts we found links to a Facebook page in Vietnamese advertising a special “tool” , which was also only a few months old.

We have detailed the evidence of this active, automated system in a report sent to DOJ. According to our estimation, system processed approximately 20,000 stolen credit cards in just 1.5 months (from the end of April 2018 to mid June 2018).

(More detailed information @ source)

https://kromtech.com/blog/security-center/digital-laundry

....

I think this illustrates the de facto methodology criminals utilize to launder money.

Terrorists, criminals and drug cartels do not commonly use bitcoin to launder money, as far as I know. Instead they use facebook and the apple store.  

This is nothing new. I remember reading many news stories like this one over the last 5-10 years which do not receive much publicity. Creating a fake app and "purchasing/selling" it is the most common and heavily utilized method to launder funds over the internet. This method is much less transparent and difficult to trace than utilizing a crypto currency like bitcoin.

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[dothebeats]

They must hide the trails of where the money would go, and surely these things would remain unnoticeable by most gov't agencies since who would buy apps with alphabet songs on it for even a dollar? Money launderers day by day are getting ingenious with their schemes, resorting to things that are left easily unnoticed even by the best of the Feds. I personally applaud them for deviating from cryptocurrencies as a means to launder money; they know so well that there will come a time when bitcoin and other crypto can't just handle the heat and no matter how convoluted the trails are, they'd eventually get caught.

[magneto]

People don't realise that bitcoin is in no way directly a path for money laundering. In fact, acquiring bitcoin without KYC and even proof of funds now is incredibly difficult. But centralised services are definitely facilitating money laundering, like this article suggests.

Anything that can benefit every day people, also has the potential to be abused by criminals. It's really as simple as that. In game gold/gems, app purchases, etc. are no different.

I never really understood the argument against bitcoin about it being used for money laundering. Obviously, there are a select few who use bitcoin for the wrong reasons. But there are way more criminals using centralised services to launder money or whatnot to their bank accounts, using fiat currency.

[nicster551]

Digital Laundry: how credit card thieves use free-to-play apps to launder their ill-gotten gains

"If you have ever played a free-to-play game you know that most of them require resources of one type or another to play. Whether it be gems, gold, power ups, or other, these resources are required to advance within the game, making them critical to the game play. Manually gathering the free resources is a slow process and one can play a game for months working to move up levels.

This is where the game makers make their money. They sell resources through “In-App Purchases” to help people play the game and speed up the game play. The lure of speeding up your play is a strong incentive to spend money on resources, and many spend to play. This has turned free-to-play games into a multi-billion dollar industry.

The resources even maintain value after purchase, because in many cases, once bought, they can be traded, adding to the game play.  The game itself can also be transferred from one account to another. Because of this, resources gathered or bought and games built to advanced levels can also be resold.  It is the selling of these on third party markets that holds the door open to the illicit activity that we found taking place.

Alexander Kernishniuk, Communications director, Kromtech:

"Money laundering through the Apple AppStore or Google Play isn’t a new idea and has been done before.  In the 2011 the Danish part of the Apple App Store was flooded with expensive suspicious applications. More than 20 out of 25 of the most downloaded applications were from China. The price of the apps ranged from $50-$100. For example, one of them “LettersTeach”, was intended for children who are learning English letters, yet it cost nearly $78.  This pointed to money laundering then, however, what we encountered now is much more sophisticated.

What did we find?
Following our MongoDB investigations and honey pots deployments from the beginning of this year, we did another round of security audit of unprotected MongoDB instances. In June 2018 we have spotted a strange database publicly exposed to the public internet (no password / login required) along with a large number of credit card numbers and personal information inside.

As we examined the database we rapidly became aware that this was not your ordinary corporate database, this database appeared to belong to credit card thieves (commonly known as carders) and that it was relatively new, only a few months old. So we dug much deeper.

It appeared to be a group of malicious actors with a complex automated system utilizing free-to-play apps, third party game and resource resale websites, and Facebook to launder money from stolen credit cards.

In one of the tables we found links to Facebook accounts. From those accounts we found links to a Facebook page in Vietnamese advertising a special “tool” , which was also only a few months old.

We have detailed the evidence of this active, automated system in a report sent to DOJ. According to our estimation, system processed approximately 20,000 stolen credit cards in just 1.5 months (from the end of April 2018 to mid June 2018).

(More detailed information @ source)

https://kromtech.com/blog/security-center/digital-laundry

....

I think this illustrates the de facto methodology criminals utilize to launder money.

Terrorists, criminals and drug cartels do not commonly use bitcoin to launder money, as far as I know. Instead they use facebook and the apple store.  

This is nothing new. I remember reading many news stories like this one over the last 5-10 years which do not receive much publicity. Creating a fake app and "purchasing/selling" it is the most common and heavily utilized method to launder funds over the internet. This method is much less transparent and difficult to trace than utilizing a crypto currency like bitcoin.

Well, you can do that anything as you wish. Criminals are starting to evolve to and they prefer not to be left out on the new way of bringing criminality. Most for it, maybe our authorities might find a way to catch them eventually.

[tenebriscaelum]

I think the most scary part of criminals using cyptocurrencies is buying illegal goods in the black market as it is untraceable they can buy almost anything from guns to drugs and from human trafficking to assassinations. Right now as we adapt to the new technology we should also be aware that criminals too are adapting to it and be careful as also hackers and scammers are on the loose.

[2start]

If only the government could think more positive about bitcoin, surely they could see and not look at one eye of news like this. they only see the negative side of bitcoin without considering the positive side. Your news is great, and can be used to defend bitcoin when cornered with money laundering topics.

[1Referee]

I never really understood the argument against bitcoin about it being used for money laundering. Obviously, there are a select few who use bitcoin for the wrong reasons. But there are way more criminals using centralised services to launder money or whatnot to their bank accounts, using fiat currency.

Indeed. People shouldn't dramatize the fact that Bitcoin is being used as a tool by criminals. I honestly don't care if people use Bitcoin for money laundering purposes, to buy drugs or weapons with, etc. Bitcoin is money in the end, and money instinctively is prone to abuse due to how convenient it is, and how easy it is to exchange it for something else. People need to grow a thicker skin and move on, because there is nothing interesting to see.

The biggest criminals and money launderers in the world are governments themselves. People need to stand up and fight for their rights; we don't have to endure this shit endlessly.

[Jamescur]

Due to the high volatility of BTC, money laundering with BTC may result in losses!
Money laundering with online games will not cause widespread concern, and it is easier to hide your identity by using online games for money laundering. It seems to be safer and harder to track!

[RockBar0]

They must hide the trails of where the money would go, and surely these things would remain unnoticeable by most gov't agencies since who would buy apps with alphabet songs on it for even a dollar? Money launderers day by day are getting ingenious with their schemes, resorting to things that are left easily unnoticed even by the best of the Feds. I personally applaud them for deviating from cryptocurrencies as a means to launder money; they know so well that there will come a time when bitcoin and other crypto can't just handle the heat and no matter how convoluted the trails are, they'd eventually get caught.

Corrupt criminals involved in money laundering are increasingly sophisticated. They think of ways to hide their assets. And especially where there is no government, they have more advantages. In particular, if this is managed, they can also be bought. Humans have greed. Overcoming greed, we can live happily ever after.