Virtual Economies and Financial Crime

Virtual Economies and Financial Crime

Money Laundering in Cyberspace

Clare Chambers-Jones

Clare Chambers-Jones examines the jurisprudential elements of cyber law in the context of virtual economic crime and explains how virtual economic crime can take place in virtual worlds. She looks at the multi-layered and interconnected issues association with the increasing trend of global and virtual banking via the ‘Second Life’ MMOG (Massively Multiplayer Online Game). Through this fascinating case study, the author illustrates how virtual worlds have created a second virtual economy which transgresses into the real, creating economic, political and social issues. Loopholes used by criminals to launder money through virtual worlds (given the lack of jurisdictional consensus on detection and prosecution) are also highlighted.

Chapter 2: History of Second Life

Clare Chambers-Jones

Subjects: economics and finance, economic crime and corruption, money and banking, law - academic, corruption and economic crime, criminal law and justice, finance and banking law, information and media law, politics and public policy, terrorism and security


To become a spectator of one’s own life is to escape the suffering of life. (Oscar Wilde, 1854–1900) INTRODUCTION Music, literature, art, performing arts, nature are all forms of escapism into other worlds and as we move towards an increasing technological world, virtual worlds are a new form of escapism that we find ourselves encapsulated within. As Oscar Wilde propounds above, we, as human beings, have used various media as a means of escaping into the unreal to avoid the real. Today these unreal worlds are taking the form of virtual worlds that engage us not only as a single entity but where we interact with others, using, simultaneously, the same medium to escape. What is interesting is that not only is the virtual world a means to escape but the traditional methods of escapism, as listed above, are also featured within the virtual world as a means of escaping the virtual. For instance, there is a thriving English Literature appreciation society within Second Life (SL) (http://, where users can meet and escape the unreal by discussing the real. Confused? The aim of this chapter is not to confuse but to highlight the beginning of this virtual world, called SL. From this historical overview and through deliberation of whether virtual worlds have real world effects, we can see how the SL fantasy has permeated reality and has had real world consequences, for the purposes of this book, in relation to the economy and virtual money laundering. HOW...

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