Metaverse will be magnet for international crime syndicates who could make billions by laundering money, experts warn

THE metaverse is already a money laundering crime scene, and experts believe it'll become more rampant, complex and profitable.

At the end of March, the feds broke up an alleged $1million scheme using NFTs in the metaverse as the suspects began to execute their second plot, according to court documents.

The busted ploy is a rain drop in the ocean compared to the potential of billions of dollars that crime syndicates can move as mega corporations sprint to invest in the virtual 3D world, experts warn.

Bion Bhedin, co-founder of the company First AML (anti-money laundering), said money launderers have already used seemingly innocent games like World of Warcraft or Roblox to secretly move "dirty" money into international accounts.

"They can then convert money from illegal activities or stolen credit cards into the game’s virtual currency," Bhedin told The Sun.

Criminals can also use multiple fake accounts or hack existing accounts to "avoid regulatory scrutiny," he said.


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The "dirty" money is typically mixed with "clean" money to avoid being traced and then split into small amounts – usually less than $10,000 – and moved into offshore accounts, Bhedin said.

The money is withdrawn, moved and converted to assets that can be turned into "clean cash," Bhedin said.

"Now with the metaverse, money laundering can be done via the same real world process," Bhedin said.

"Since the Metaverse is essentially a space populated by virtual businesses selling virtual goods, money launderers can use the same real-world tactics of placement, layering and extraction to clean their money.

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"They will be able to repeat this step over and over again using different amounts each time, making transactions extremely difficult to trace."

The money is withdrawn from the metaverse by buying something from another user, converted back to real currency – potentially overseas – he said.

"And just like that, money that went into the metaverse dirty, comes out clean."


The metaverse's sudden boom of massive investments are outpacing real world policing, Behdin said.

Coupled with the "lightning fast" transactions "that are too fast for humans to detect begins to paint a stark picture," he said.

"Technology allows the interlinking of individuals, companies and states across the globe. A key feature of technology is that it allows businesses to scale quickly. This is no different for illicit and illegal businesses.

"The Crown Casino in Australia was just accused of letting $69billion to be laundered through the casino between 50 well known patrons over five years.

"Imagine what a digital casino, in the metaverse, using thousands of fake profiles and hidden crypto transactions could do?"

The actual top-end amount of how much money can be amassed and moved in the metaverse is unknown at this time, according to former Manhattan prosecutor John Bandler.

"With crytocurrency, it can be a lot," said Bandler, who teaches cyber crime at

"For example, you might be able to create an imaginary house in the virtual world and sell it for real value, and it's a good way to transfer money," he said.

Behdin said the possibility of money laundering through the metaverse is "endless."


That's a question that experts have different theories about.

North Carolina lawyer Patrick Roberts said it could fall under the jurisdictions of the SEC, Department of Justice or even a new agency.

Behdin said there's no INTERPOL (International Criminal Police Organization) or a similar agency for the metaverse.

That's going to be tough to crack down on money laundering and track digital criminals, he said.

"I think we are years down the road from getting an answer to this," Roberts said. "No one is championing the cause. There needs to be a federal, uniform infrastructure in place, but crime might have moved on by the time one is in place."

Then there's the question of prosecution.

The Department of Justice filed federal charges against two men who allegedly executed a $1million scheme at the end of the March.

But as the amount of money increases and the cases become more complex, more obstacles could hinder prosecution.

A big one is the anonimity of the metaverse, according to Greg Pryor, a law with the Reedsmith law firm.

"If you want to find someone online who's doing something criminal, you normally have to subpoena someone. But who do you subpoena?" Pryor said.

It might come down to what role the government will play and what role will the individual consumer play, Bandler said.


Pryor said themetaverse "is here to stay because crytocurrency is here to stay."

And anytime there is real monetary value, crime is a legitimate concern, he said.

Right now, the development and investments into the metaverse development seem to be outpacing the framework to combat potential crimes.

SEC filings by shareholders of Meta (formerly Facebook), which were obtained by The Sun, expressed concerns about crime in the metaverse.

In one of the filings, the shareholder group said, Meta's "'Move fast and break things' may have worked for the company when it was a scrappy newcomer, but that philosophy is no longer functional at the scale Meta operates today.

"'Move fast and break things' culture and philosophy has come into dissonance with a fundamental ethical challenge.

"It has evolved within a rudderless, ethically and socially inept form, in which the external controls anticipated by governments have so far proven unable to keep pace with the amount of damage posed by its technical interventions and continual scaling."

In previous statements from Facebook, the company said in emails that the metaverse is like the internet and will exist with or without Facebook.

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The company's shareholders seem to address this statement in the filings.

"In light of its seeming lack of an internal ethical compass, the company (Meta formerly Facebook) has attempted to cast the problem as one that must be addressed by society, not by the company."

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