5 ms·

this has been the case since at least 2012 (russian mob, i think), it was a very efficient payout mechanism because you can buy keys for $2.50 and resell for $2

by huac 7y ago

this has been the case since at least 2012 (russian mob, i think), it was a very efficient payout mechanism because you can buy keys for $2.50 and resell for $2 ish, for around a 80% recovery rate. in tf2 we had other mechanisms, e.g. bills hat = $10, earbuds = $20-25, max head = $150 for storing value, not sure if CSGO has similar things. maybe now people will just use the keys and gamble on boxes and resell the skinned guns. all of that is to say that you aren't going to stop money launderers by cutting liquidity, you do it by identifying their behaviors and blocking them based on that.

leoc 7y ago
It's certainly been speculated about since 2012, at the very least: https://www.reddit.com/r/tf2/comments/134u4d/1111_key_injection_and_economy_manipulation/c70v4xc/ https://www.reddit.com/r/tf2/comments/134u4d/1111_key_inject... However it seems to have attracted almost no interest from journalists, for whatever reason. OTOH, since "worldwide fraud networks have recently shifted to using CS:GO keys to liquidate their gains" probably has at least some basis in reality, what's the story there? What other methods are criminals (presumably) shying away from now?
ben174 7y ago
Why is this necessary? With crypto it's super easy to use a tumbler or simply convert to an unregulated exchange and back again.
- rebuilder 7y ago
  Speed, cost come to mind.
  - eru 7y ago
    Also eg bitcoin leaves a globally readable audit trail.
    - ddtaylor 7y ago
      Monero doesn't.
      - eru 7y ago
        At the risk of splitting hairs: even Monero leaves a globally readable audit trail. It's just designed to be much harder / impossible to track. But no one needs even a warrant to start analyzing. Random criminals are well advised not to trust their own judgement about crypto claims, nor their own prowess in operations security. Keep in mind that eg lots of bitcoin exchanges have been hacked without any flaw in bitcoin itself. It's probably even easier to accidentally leak information, even if the underlying coin you are using doesn't.
- rtpg 7y ago
  Because in practice the places where it’s easy to go from BTC to fiat, and the places where you can easily money launderers, are distinct. Financial regulation has caught up to most of the exchanges and it’s not always easy to get cash out of a system (and that’s not even mentioning loads of shadier exchanges near-guaranteed insolvency)
- antihero 7y ago
  Exchanges are subject to AML
viraptor 7y ago
On Steam market you can do better. I keep buying cases and selling them at minimal profit (but tens of cents a day do add up over time). The price swing is just slightly larger than steam's share on the trade. (Of course if you want to liquidate to non-trivial amount of money, you're probably not interested in speculation)
- CydeWeys 7y ago
  What does your hourly wage from doing this look like? Just curious.
  - viraptor 7y ago
    Heh, it's not a wage. It's "mindlessly click buy/sell after getting market notification and get a free game a year".
    - animal531 7y ago
      It is actually a wage, that time isn't free. You could get a job at McDonalds for 1-2 weeks of the year and make the same amount of money in probably a lot less time.
      - Cthulhu_ 7y ago
        Yes but is that fun? Not everything is about making money.
        pluma 7y ago
        Alternative take: it is about making money but paid labor is an exchange in return for money and what you put in is more than just time and effort. If you like your job, your cost looks very different from doing an equally demanding job you hate. The emotional cost is real and can have long-term effects on your health. Plus of course clicking stuff on your computer is something you can do in your time wherever you are as long as you have an Internet connection. Working for 1-2 hours at a gas station (or McDonald's or whatever) requires a fixed schedule and commuting, not to mention that you'd likely need to agree to a minimum number of working hours and are unable to just skip it whenever you want. "Why don't you do this other form of unskilled labor for minimum wage instead" is a legitimate question when the current alternative is time consuming and they're struggling to make ends meet. Not so much when it's something they do for fun every now and then while already holding a job that pays above minimum wage.
rococode 7y ago
I think CSGO doesn't have as many stable "currency items" like buds or refs in TF2; keys are pretty much the only currency item. But it still has plenty of high-price items that can be sold reliably for prices upwards of $1000, just like some unusuals and things in TF2. (Disclaimer: haven't done any trading in CSGO for a couple years, TF2 for many years) I agree that this change only complicates the process and probably doesn't stop them. Launderers are just going run the numbers (since drop rates are public), and at the scale they're operating at they can probably rely on expected values. If the new margins still work for them they'll just unlock boxes and sell the skins directly. And I'm inclined to think the margins will still work, since the market kind of naturally prices items around key costs.
- pingyong 7y ago
  Margins are really, really bad though. You get like $1 for $10 of keys. Plus it takes a huge amount of time to open all those chests. Plus if you need that many chests you need to buy those from the market. I think it's not going to be worth it for a lot of people.
eru 7y ago
> all of that is to say that you aren't going to stop money launderers by cutting liquidity, you do it by identifying their behaviors and blocking them based on that. Valve doesn't need to stop money laundering. They just need the money launderers to go elsewhere. (And they need the regulators to leave Valve alone.)

by huac 7y ago

leoc 7y ago

It's certainly been speculated about since 2012, at the very least: https://www.reddit.com/r/tf2/comments/134u4d/1111_key_injection_and_economy_manipulation/c70v4xc/ https://www.reddit.com/r/tf2/comments/134u4d/1111_key_inject... However it seems to have attracted almost no interest from journalists, for whatever reason. OTOH, since "worldwide fraud networks have recently shifted to using CS:GO keys to liquidate their gains" probably has at least some basis in reality, what's the story there? What other methods are criminals (presumably) shying away from now?

ben174 7y ago

Why is this necessary? With crypto it's super easy to use a tumbler or simply convert to an unregulated exchange and back again.

rebuilder 7y ago
Speed, cost come to mind.
- eru 7y ago
  Also eg bitcoin leaves a globally readable audit trail.
  - ddtaylor 7y ago
    Monero doesn't.
    - eru 7y ago
      At the risk of splitting hairs: even Monero leaves a globally readable audit trail. It's just designed to be much harder / impossible to track. But no one needs even a warrant to start analyzing. Random criminals are well advised not to trust their own judgement about crypto claims, nor their own prowess in operations security. Keep in mind that eg lots of bitcoin exchanges have been hacked without any flaw in bitcoin itself. It's probably even easier to accidentally leak information, even if the underlying coin you are using doesn't.
rtpg 7y ago
Because in practice the places where it’s easy to go from BTC to fiat, and the places where you can easily money launderers, are distinct. Financial regulation has caught up to most of the exchanges and it’s not always easy to get cash out of a system (and that’s not even mentioning loads of shadier exchanges near-guaranteed insolvency)
antihero 7y ago
Exchanges are subject to AML

viraptor 7y ago

On Steam market you can do better. I keep buying cases and selling them at minimal profit (but tens of cents a day do add up over time). The price swing is just slightly larger than steam's share on the trade. (Of course if you want to liquidate to non-trivial amount of money, you're probably not interested in speculation)

CydeWeys 7y ago
What does your hourly wage from doing this look like? Just curious.
- viraptor 7y ago
  Heh, it's not a wage. It's "mindlessly click buy/sell after getting market notification and get a free game a year".
  - animal531 7y ago
    It is actually a wage, that time isn't free. You could get a job at McDonalds for 1-2 weeks of the year and make the same amount of money in probably a lot less time.
    - Cthulhu_ 7y ago
      Yes but is that fun? Not everything is about making money.
      - pluma 7y ago
        Alternative take: it is about making money but paid labor is an exchange in return for money and what you put in is more than just time and effort. If you like your job, your cost looks very different from doing an equally demanding job you hate. The emotional cost is real and can have long-term effects on your health. Plus of course clicking stuff on your computer is something you can do in your time wherever you are as long as you have an Internet connection. Working for 1-2 hours at a gas station (or McDonald's or whatever) requires a fixed schedule and commuting, not to mention that you'd likely need to agree to a minimum number of working hours and are unable to just skip it whenever you want. "Why don't you do this other form of unskilled labor for minimum wage instead" is a legitimate question when the current alternative is time consuming and they're struggling to make ends meet. Not so much when it's something they do for fun every now and then while already holding a job that pays above minimum wage.

rococode 7y ago

I think CSGO doesn't have as many stable "currency items" like buds or refs in TF2; keys are pretty much the only currency item. But it still has plenty of high-price items that can be sold reliably for prices upwards of $1000, just like some unusuals and things in TF2. (Disclaimer: haven't done any trading in CSGO for a couple years, TF2 for many years) I agree that this change only complicates the process and probably doesn't stop them. Launderers are just going run the numbers (since drop rates are public), and at the scale they're operating at they can probably rely on expected values. If the new margins still work for them they'll just unlock boxes and sell the skins directly. And I'm inclined to think the margins will still work, since the market kind of naturally prices items around key costs.

pingyong 7y ago
Margins are really, really bad though. You get like $1 for $10 of keys. Plus it takes a huge amount of time to open all those chests. Plus if you need that many chests you need to buy those from the market. I think it's not going to be worth it for a lot of people.

eru 7y ago

> all of that is to say that you aren't going to stop money launderers by cutting liquidity, you do it by identifying their behaviors and blocking them based on that. Valve doesn't need to stop money laundering. They just need the money launderers to go elsewhere. (And they need the regulators to leave Valve alone.)