Why does law enforcement ignore the virtual economy?

Is it still theft if the money is not real?

Is it still theft if the money is not real?

Consider the following scenarios:

  • A person has all of their money taken from their bank account by fraudsters.
  • An armed gang enters a bank and takes all of the cash stored there.
  • A person has their credit card stolen and the thief goes on a shopping spree.
  • A group of individuals shows up at a house where there are drug transactions conducted and steals millions of dollars.
  • A fraudster sets up a fake securities firm to lure people to leave money in his trust, and then takes off with all of their assets.

You would assume that in any of those situations law enforcement agencies would become involved and would attempt to capture and prosecute the perpetrators, and that a failure to do so would be a serious neglect of their functions. Yet, all of the above have some sort of equivalent in virtual economies, and they have not been pursued by authorities in any shape or form. The number of prosecutions dealing with cyber-fraud involving virtual worlds, theft of virtual goods, or even the breaking of trust involved in virtual currency transactions, is minimal.

Yet this is a topic of great economic importance. At the time of writing Bitcoin, the virtual currency, is flying high and involved in a bubble. Despite its current popularity, I still harbour several doubts about its viability, but this does not detract from the fact that Bitcoins are valuable. Why is it then that throughout its history, thousands of Bitcoins have been stolen at different stages, yet not a single of those past  events has been investigated? In one instance a hacker stole 20,000 BTC from a user. In another, an exchange was set and then the owner took the money and ran. Just recently, money from Sheep Marketplace, a website where users used Bitcoin to buy drugs, was stolen by hackers. Reports vary about just how much was stolen, but it is thought that as much as $220 million USD might have been taken.

This pattern has plagued all aspects of the virtual economy, from games to virtual spaces. The assumption seems to be that if it happens in a game, it is not worthy of attention. Hopefully, things might be about to change. Just recently authorities in China and Germany are holding suspects that might have been involved in a malware campaign to steal Bitcoins.

One thing is evident, unless law enforcement protects virtual users, the enticement will be there to attract thieves and fraudsters against what could be considered easy money.