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 3: Evolution of Virtual Economies

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


Whoever controls the volume of money in any country is absolute master of all industry and commerce. (President James A. Garfield) INTRODUCTION Within this chapter the movement of money and the philosophy behind virtual economies will be discussed. The aim of the chapter is to enable the reader to understand the concepts of virtual economies and the virtual marketplace within virtual worlds. Furthermore, the chapter will advance the position of the book, that the virtual is not as virtual as one may initially think. That the virtual is affected by the real and the real by the virtual demonstrates the continuum of existence that has occurred since human beings evolved. This chapter on virtual economies advocates this theory and will outline the rationale and thinking behind this proposition. In doing this, virtual e-commerce will be discussed alongside the virtual economy and the achievements and benefits the virtual economy has to offer. To this end the economy and marketplace of Second Life will be examined. The chapter will move on to explore the possible macroeconomic impacts of virtual worlds on real world economies. Furthering this theme of synergies between the virtual and the real, an exploration of virtual bank runs and the virtual economic crisis will be examined. First and foremost, we must turn our attention to the virtual world and its economies, which we will later discuss. In Chapter 2, we discussed the history and development of Second Life. So at this point, we turn to consider what a virtual...

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