Legal Issues

by Mike Masnick

Korea Doesn't Want That Virtual Currency To Be Traded For Real Money

from the and-you-will-do-this-how-exactly? dept

It's not like people haven't been warning others around the world about the potential tricky issues that come up with online worlds and offline laws -- but it seems that no one paid much attention and everyone simply plowed onwards. As these worlds gain more attention and users (though, perhaps not as many as the press would have you believe), governments are increasingly taking an interest in them. There's the obvious issue of taxation of virtual winnings, which some governments are starting to explore, but a bigger issue may be the secondary economies found within these worlds, and what that means for government-level monetary policy. The idea that of these kinds of secondary currency systems forming beneath the surface of official currencies is nothing new at all, but are usually narrowly focused on local communities. However, when that "local community" suddenly gets much bigger thanks to the internet, it can represent a big issue.

It appears that South Korean politicians are trying to tackle this issue, but are doing so badly. They've put forth legislation that would ban the trading of virtual currencies, as an attempt to cut off the use of in-game money as an alternative to real money. Of course, trading virtual currencies and objects from within these games is a big part of the appeal of the games -- and has proven pretty much unstoppable for games that have tried to prevent it from happening. Black markets open up very quickly. To make matters even worse, the South Korean proposal only looks to ban the trading of in-game currencies, not in-game items. In other words, all you need to do if you want to trade in-game currency is buy some sort of object in the game, and then trade or sell that, and you've now stayed within the law, but accomplished the same exact thing. It's no surprise that governments are worried about these non-regulated currencies, but simply announcing a ban on trading them clearly isn't going to be very effective.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Not-so-Anonymous Coward, Dec 26th, 2006 @ 3:39pm

    LOL /cry

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, Dec 26th, 2006 @ 3:47pm

    replace south with north and it makes a little more sense

    reply to this | link to this | view in thread ]

  3. identicon
    Seth Finkelstein, Dec 26th, 2006 @ 4:05pm

    It's about online gambling

    If you read closely, it's about online gambling. Like if you have "CasinoLife" where you get a virtual currency of "Chips", and your stack of "Chips" can increase or deccrease depending on what you do in the Casino World.

    They're just not that into you, with regard to SecondHype and similar.

    reply to this | link to this | view in thread ]

  4. identicon
    Er, what?, Dec 26th, 2006 @ 5:35pm


    There is no such thing as a "virtual" currency, or "secondary economy". Real people are putting real resources into online communities, and it's part of a real, globalized economy. Taxation on profits realized from these systems is to be expected, as are futile efforts at controlling things like currency trading. Frankly,I wish I had the where-with-all to set up a Second Life/WoW/Dollar/Euro arbitrage system. The person who does is going to be a modern day Rothschild.

    reply to this | link to this | view in thread ]

  5. identicon
    XCetron, Dec 26th, 2006 @ 8:09pm

    Well, I believe the matter is much more complex due to the government not being able to control/regulate the virtual currency and that sooner or later will affect the realworld economy. If say you pay XX ammount of dollar for XX ammount of money in a virtual game, that ammount of virtual money is still virtual but it somewhat affect the economy outside of the game as the company can create an infinite ammount of virtual money and sell them for real money. This greatly disturb the normal system which everyone is used to. There is probably a way in which this can be controlled but I dont think anyone found it yet.

    But hey, wth do I know, I dont work for the government

    reply to this | link to this | view in thread ]

  6. identicon
    mmo player, Dec 26th, 2006 @ 10:12pm

    so, are mmorpg's covered?

    why not ban currancy exchange from game world into the real world.

    game currancy can still exsist, just wnt have an affect on the real world.

    you can still pour money into the game, just cant get it out.

    that last ones to stop the bloody cash farmers from wow.

    also what effect will us hackers have on the game/real world money when we can create somthing from nothing and bring it to the real world to become somthing, why not ban money from coming out of games, that way we only create somthing that is nothing.

    reply to this | link to this | view in thread ]

  7. identicon
    dorpus, Dec 26th, 2006 @ 11:49pm

    Money Laundering

    What's to prevent this stuff from turning into a North Korean money laundering scheme?

    I'm writing to you from a smokey internet cafe in Tokyo (Moopa), where it's $9 for 3 hours in a private booth with a sofa and unlimited coffee, comic books, internet. I also write to you as being a victim of a violent crime in Roppongi last week, when a Nigerian thug bloodied my face because I shook his arm off when he tried to make me go into a whorehouse. I went straight to the police station nearby and was able to get his ass arrested 10 minutes later.

    reply to this | link to this | view in thread ]

  8. identicon
    tek'a, Dec 27th, 2006 @ 9:57am

    thanks for that jewel of confusion and wandering logic, dorpus.

    im sure the fact(in your mind, if nothing else) that you got smacked around a bit while escaping a whorehouse is important and relavent to the difficulties of RMT effects on real and virtual money systems.

    I DO see that this is a strange thing to consider, being almost entirly unenforcable, full of security holes to allow "bad people" to slip through, while any system is also making more hoops for legitmate MMOG makers and developers to jump through.

    reply to this | link to this | view in thread ]

  9. identicon
    Miller, Apr 28th, 2009 @ 4:25am


    Hi, A very smart and diplomatic answer. It’s really appreciable and generous. Miller Virtual Currency

    reply to this | link to this | view in thread ]

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