Virtual Threats: Terrorist Financing via Online Gaming

A growing blind spot in financial crime prevention

The global video game industry reached $187.7 billion in revenue in 2024 and draws roughly 3.4 billion players worldwide. That scale and diversity create a complex environment where illicit actors can hide within legitimate activity. While regulators and researchers have devoted considerable attention to content moderation and countering recruitment and propaganda in games, the financial crime risks in this ecosystem remain comparatively overlooked. This article synthesises recent research and operational findings to explain how online gaming and gaming-adjacent platforms can be misused for money laundering and fundraising by terrorist and extremist actors, where current regulatory gaps lie, and what practical first steps policymakers and practitioners should take.

How the gaming economy can enable money laundering

Many mainstream online games host vibrant internal economies based on microtransactions – cosmetic items, upgrades, loot boxes and other virtual goods bought with fiat currency. These items can acquire real economic value because players trade, sell and buy them both inside games and via third-party marketplaces. When in-game items are convertible, directly or indirectly, into cash or cryptocurrency, they function like virtual assets and can be used to move value without the same controls applied to traditional payment systems.

Criminal groups have long exploited microtransaction markets. Research and investigative reporting have shown widespread abuse of in-game economies for laundering proceeds; for example, patterns identified where stolen or prepaid cards were used to buy valuable in-game items that were later sold at a loss to attract buyers and convert proceeds into fungible value. Loot boxes – gambling-style purchases with randomised rewards – add further opacity and scale to these flows.

For terrorist and violent-extremist actors, the evidence of systematic use of in-game items for financing is more limited than for organised criminals, but significant vulnerabilities remain. Bespoke extremist games and modifications (mods) can generate direct sales revenue. More importantly, livestreamed gameplay and gaming-adjacent communications provide channels for soliciting donations that can generate substantial sums quickly and with limited oversight.

Bastian Schwind-Wagner _Follow

"Online gaming presents clear vulnerabilities that can be exploited for money laundering and the fundraising of extremist causes, particularly through livestream donations and the convertibility of in-game items into real value. A focused, proportionate regulatory response and improved platform controls are needed to reduce these risks without unduly constraining legitimate gaming activity.

Immediate actions – conducting a sectoral risk assessment, clarifying obligations between platforms and payment providers, and enhancing reporting and moderation tools – will provide investigators and regulators with the visibility required to disrupt illicit flows. Monitoring the intersection of gaming with blockchain and tokenisation will prevent future exploitation as virtual economies evolve."

Bespoke games, mods and direct sales – revenue streams with surveillance challenges

Across ideological spectrums, extremist groups and individuals have produced original games and modifications that convey their narratives. While many such titles attract attention and are taken down from mainstream distribution platforms, several have been commercially successful enough to generate notable revenue – estimates from analysed titles on platforms like Steam range from tens of thousands to low hundreds of thousands of dollars. Examples include far‑right and Islamist-themed titles released in the 2000s and later, some sold at prices that include symbolic references meaningful to extremist communities.

Mods created for popular sandbox and multiplayer titles allow the reuse of mainstream platforms’ reach to spread ideology and, occasionally, monetise content. Although most mods are distributed for free, their appeal to sympathetic audiences, merchandising or paid bundles can produce fundraising opportunities that are harder for investigators to track when distributed through multiple channels and partial removal from mainstream stores.

Livestreaming and in-play solicitation – the immediate fundraising threat

The largest and clearest financial risk in the gaming context comes from livestreaming and real-time fundraising during gameplay. Streamers can solicit donations from audiences live, receive tips via platform-native currencies or crypto, offer paid access, or promote direct-transfer methods. Noteworthy instances include livestreamed tournaments and events that raised six-figure sums for politically extreme causes. Livestreams have the practical advantage for fundraisers of combining audience engagement with direct payment hooks – tipping, subscriptions, NFT drops, merchandise and links to external crowdfunding. These flows can be high-volume, cross-border and fast-moving, posing significant detection challenges if platform controls and reporting are weak.

Gaming communications as recruitment and covert financial channels

Gaming platforms and adjacent apps provide in-game voice, text and video chat functionalities that extremists have used to communicate, recruit and coordinate. These features also enable financial instruction – teaching supporters how to move funds using gift cards, gaming items, crypto or anonymising tactics – and direct solicitation of donations from sympathetic players. As mainstream social media enforcement tightens, researchers and practitioners have observed migration to less-moderated gaming spaces. The privacy characteristics of voice and private-group chats complicate monitoring, especially where user identity verification is limited.

Blockchain, NFTs and nascent environments – evolving risks

Emerging technologies are reshaping available avenues for value transfer. Blockchain-based virtual assets, NFTs and nascent environments enable digital ownership, tradable collectibles and bespoke currencies. These innovations can be legitimate commercial developments, but they also create new modes to convert fundraising into liquid value or to gate access to monetised extremist communities via token ownership. The decentralised and sometimes pseudonymous nature of these instruments increases the risk of value being obscured and moved outside traditional financial oversight. While the immediate money-laundering risks from nascent environment activities may exceed quantified evidence of terrorist financing today, the trajectory of integration between gaming and virtual finance calls for early attention.

Regulatory gaps and operational challenges

Current anti-money laundering and counter-terrorist financing (AML/CTF) frameworks have tended to focus on online gambling and exchanges of virtual assets for fiat, leaving many in-game currencies, items and platform-specific mechanisms insufficiently covered. The Fifth EU Anti‑Money Laundering Directive narrowed in scope by excluding in-game virtual currencies that remain confined to their gaming environments and are not convertible for fiat. Nonetheless, when in-game items or currencies are traded outside the game or can be cashed out via third-party services or crypto, they meet virtual asset definitions used by bodies such as the FATF.

Operationally, platforms typically lack robust Know Your Customer (KYC) and transaction monitoring capabilities that financial institutions possess. Payment service providers often handle the actual fiat transactions for microtransactions, which creates a ‘pass the buck’ problem – responsibility for customer due diligence can fall between game operators and payments processors. Voice chat moderation is also technically harder than text moderation, and private or invite-only groups further reduce transparency. Finally, the blurred boundary between violent-designated terrorist groups and non-designated violent or hateful extremists complicates clear enforcement thresholds for obliged entities.

Practical first steps for authorities and industry

1. Conduct a sectoral risk assessment
   International standard-setters such as the FATF should lead a dedicated, empirically grounded sectoral risk analysis of the video games industry and related platforms. That assessment should examine where virtual items and currencies become convertible, the scale of livestream donations, the prevalence of third-party marketplaces, and the interplay with crypto and NFTs. The EU should consider a targeted AML/CTF sectoral risk report on gaming as part of its market and cross-border risk workstream.
2. Clarify obligations and information flows
   Regulators should clarify responsibilities between game operators and payment service providers for KYC, transaction monitoring and suspicious activity reporting when in-game purchases have real-world convertibility. Where platform-native currencies or items are fungible with external markets, operators should have obligations proportional to the quantified risk.
3. Improve reporting mechanisms and intelligence sharing
   Introducing reporting channels for suspicious fundraising on gaming platforms would give law enforcement better visibility into the scale and methods used. Tasking AML/CTF working groups to build guidance on indicators specific to gaming – for both microtransaction abuse and livestream solicitations – would support investigators and industry compliance teams.
4. Strengthen moderation and technical controls around livestreams and voice
   Platforms should expand and sharpen tools to detect coordinated solicitation, fundraising links embedded in streams, and suspicious tips. Audio moderation tools and anomaly detection for rapid spikes in donation flows would reduce the window for illicit fundraising.
5. Monitor emerging virtual-asset integrations
   Regulators should track how blockchain, NFTs and nascent environments projects connect with gaming ecosystems and evaluate where existing virtual asset regulation applies. Where tokenised assets or NFTs function as a gateway to exclusive communities or are readily tradable for fiat/crypto, AML controls and provenance requirements should be considered.

Conclusion – proportionate, risk-based responses now to reduce future harm

Online gaming is a legitimate, highly active industry with major economic and social value. It is also a heterogeneous landscape where money-laundering techniques are well evidenced and where emerging fundraising modalities – livestream tips, bespoke game sales, tokenised assets and gaming-adjacent platforms – create realistic opportunities for terrorists and extremists. The most immediate financial crime risk today lies in unregulated donation mechanisms during livestreams and the convertibility of in-game items via third-party markets.

A focused, proportionate approach is needed – led by a sectoral risk assessment, clearer allocation of compliance responsibilities, better reporting and technical controls, and ongoing monitoring of blockchain-enabled developments. These measures would preserve the legitimate benefits of gaming while closing the gaps that allow criminal and extremist actors to exploit its economies and communications channels.

Dive deeper

• Research ¦ Gonzalo Saiz, Virtual Threats: Terrorist Financing via Online Gaming, Project craaft, Research Briefing No. 1, published in 2025 by the Royal United Services Institute for Defence and Security Studies ¦ Link ¦ licensed under the following terms, with no changes made: CC BY-NC-ND 4.0
• RUSI ¦ Video: Virtual Threats: Terrorist Financing via Online Gaming, RUSI Webinar 18 June 2025 ¦ Link (YouTube)