Over the past few years, ID authentication and KYC regulations have become more and more prominent. Many governments have updated their KYC regulations to help prevent the chances of fraudulent or terrorist activity. One of the industries that should be jumping on board this train of enhanced management is the gaming industry. The gaming industry is currently eyeing 2nd gen technology to comply with KYC regulations and new ID authentication, but the rollout is slow.
More People Game Online Than Ever Before
When playing games online, you don’t have any idea who you’re playing with or against. Statistics indicate that more than 1.2 billion people are playing games online and that the revenue of the online gaming and gambling market are supposed to exceed $74 billion by 2023. As you can imagine, this creates an environment that is especially dangerous, especially for children.
With a gaming console and internet subscription, it’s easy for criminals to come into contact with victims. The types of activities that can occur in online gaming forums include:
• Money laundering
• Terrorist activities and coordination
• Black market activities, such as the sale of drugs
• Prostitution and the coordination of the sex trade
Why There Is A Need For Online Verification
In the past couple of years, the video game Fortnite has become increasingly popular. More than 200 million people play the game, and its become more popular than both Minecraft and World of Warcraft. However, a recent report found that criminals were using the game for money laundering activities.
The Fortnight game has its own virtual currency, known as V-bucks. Players can use their credit cards to purchase V-bucks in the game. Criminals, however, are stealing legitimate credit cards and purchasing V-bucks. They then sell the V-bucks to other game players at a discounted rate. Many of the people buying the discounted V-bucks are innocent children and teenagers who suspect nothing more than a convenient deal.
The ability to cycle through V-bucks allows customers to, essentially, “clean” and launder money. Studies have found that these operations occur on a global scale in countries such as:
• United States
• The Middle East
• Latin America
Sixgill senior intelligence analyst told The Independent, “Criminals are executing carding fraud and getting money in and out of the Fortnite system with relative impunity. Threat actors are scoffing at Epic Games’ weak security measures, saying the company doesn’t see to care about players defrauding the system and purchasing discounted V-bucks. This directly touches on the ability of threat actors to launder money through the game.”
Obviously, ID verification would make it much more difficult for these individuals to launder money. Epic Games could build KYC regulations into the V-bucks portal. They could make customers provide proof of identification that matches the name on the credit card. They could also attach V-bucks to an individual’s name or online identity.
purchased, you could not sell V-bucks anywhere but in the game’s online portal. Perhaps when doing so, both parties would have to provide identification. This process already exists in places like Forex exchanges.
Ways To Implement Verification Into Online Gaming
There are a couple of ways in which producers could build verification and KYC regulations into their video games. First and foremost, any purchase of tokens, coins, or currency online should require verification. Second, video game producers could require users to provide identification before registering.
This would require an extensive database to store the information. However, doing so would allow producers to red-flag any accounts that they believe are conducting criminal activity. They could then take action to shut down the fraudulent account. If they were to do so now, nothing is stopping an individual from opening a new account with a different username. With ID verification, the person would not be allowed to open a new account.
If producers didn’t want to store this much data, they could potentially scan the names through databases to ensure that no criminals gain access to their site. For instance, imagine that a registered sex offender attempts to register to play a video game online. However, after providing ID verification, the person is denied access to the game. This could help make the online world significantly safer and more enjoyable.
Fortunately, today’s technology makes ID verification much more accessible to the average individual. For instance, 2nd-generation ID verification takes advantage of a user’s dual smartphone cameras to scan through hologram images on government-issued IDs, such as a driver’s license or passport. The user could then upload a picture of their face to confirm a positive match.
Gaming producers could also invest in technology that provides instant ID verification decisions. They don’t need to have someone manually review the applications to play the game. Today’s verification technology has come a long way and can provide users with nearly-instant authorization.