Skin Trade: Preventing And Punishing Digital Asset Theft

In-game assets can take the form of any good or attribute that can be purchased within a gaming platform using real or virtual currency. Examples include specialized character skins, clothing, weapons, magic spells, supplies, and performance enhancements.

Some players enthusiastically pay big money to acquire rare assets for use in online games. Digital items’ market-determined value often far exceeds their usefulness in the game itself. In many cases, players derive utility by simply owning, admiring, and showing off these possessions. For instance, many players demonstrate a strong desire to customize their game characters and avatars, vehicles and dwellings, and occupy lucrative virtual real estate. Digital clothing, artwork, color schemes, and other bespoke tailoring offer opportunities to both stand out in the crowd and increase one’s popularity among peers, so building social value.

As players place more and more stock in these virtual assets, they take accrue value beyond the immediate gaming environment. Indeed, the growing demand for digital assets has expanded the entrepreneurial scope presented by gaming. The global digital asset market is expected to reach $190 billion by 2025. 

Attracting Crooks

Just as in the real world, tremendous market opportunity attracts bad actors. Theft of digital assets is a problem in the modern video games industry, and gaming platforms, players, and marketplaces are working to prevent and punish such activity.

Many are calling on national and international law enforcement agencies to get involved. Like more tangible and intrinsically valuable assets outside gaming, they argue, virtual assets should be protected due to the time, energy, and resources required for players to grow, create, or buy their armament, skills, and game customizations.

Bad actors employ numerous schemes for stealing digital assets, often tailoring their methods to specific games and forums. Motives may vary. Some people steal so they can profit by selling their ill-gotten gains; others simply steal items, cosmetics, or avatars for their own use. While game developers, websites, and other online businesses exercise due diligence and follow strict regulations such as GDPR and CCPA to guard users’ personal data, protecting digital assets presents a greater challenge. The tools are less defined, and cooperation among stakeholders has yet to become established. Courts around the world including those in the Netherlands and the Czech Republic have determined that stealing virtual items is illegal, and now gamers and platforms have begun taking it upon themselves to prevent it. eBay, for example, banned transactions involving virtual property back in 2007 and hasn’t changed its position since. The popularity of real money trading (RMT) of virtual goods like characters, in-game currency, skins, weapons, and more, however, has skyrocketed and several platforms have emerged to support such trading. Virtual marketplaces such as GameFlip and DMarket enable players, speculators, and investors to buy, sell, barter, and trade all manner of digital assets for real money.  This legitimization of RMT has further incentivized thieves to target virtual assets.

Preventative Measures

Unfortunately for gamers and developers, both gaming industry bodies and law enforcement organizations have been slow to prioritize the prevention and punishment of in-game asset theft. There are no significant laws or regulations specifically designed to protect asset owners. The law is still murky as to whether theft of digital assets constitutes the same level of crime as stealing real-world property. What’s more, law enforcement agencies will likely not investigate virtual asset theft unless and until it becomes a systemic problem or serious real-world money is at stake. While the FBI and other federal agencies tasked with preventing internet fraud and theft may bust crime rings and specific scams, the probability of their investing resources to track down stolen skins, weapons, or user accounts is low. 

For most gamers determined to protect their virtual property, the best course of action is to take matters into their own hands. There are a few basic steps all gamers can take to protect their virtual assets from hackers:

  • Be alert for common phishing scams disguised as gaming communications. Hackers will use phishing emails to steal account information that allows them access to players’ virtual property. Never click suspicious email links and only enter account details on the platform after establishing that it is legitimate.
  • Use unique, hard-to-guess passwords and protect them at all costs. compromised credentials provide the easiest way for crooks to initiate online thefts. Keep your password secure. Be skeptical of required patches, links in the chat, users requesting information, and any other strange activity. If there is a breach, immediately inform platform administrators who may then be able to offer some protection. Learn more about protecting your online gaming information
  • Use all protections available on the platform. Take advantage of player authorization systems that confirm your identity. Report any concerns to game administrators. And customize and document your prized virtual assets so they are easier to recover if they are stolen. 

Like other online scammers, would-be thieves prowling the video game space prey on trust, naivety, and a lack of awareness. The best way to protect virtual assets is to treat them the same way you would handle real-world assets like your ATM card and car keys. Be wary of scams through email and in-game-related communications. At this stage, law enforcement will likely only investigate large-scale operations and won’t take on individual cases; there will be no pound of cure, so be sure to employ an ounce of prevention. For gamers who do become victims of theft, seeking redress through the individual game platform may be the immediate and best option to recover their goods.

Industry Self-policing

Game platform holders and administrators are acutely aware that asset theft takes place within their games. Many platforms have implemented procedures, monitors, and administrators dedicated to rooting out thieves and tracking down stolen goods. In addition to these virtual “boots on the ground,” some platforms are turning to blockchain technology and ledgers to prevent theft. Blockchain can be an effective deterrent; in virtual realms that lack accountability, blockchain provides an infrastructure for creating a system for recording and preserving transactions between people over the internet. With a transparent ledger, it is difficult, if not impossible, to hack, attack, or reverse any transactions made through the blockchain. This type of security will help prevent theft in the gaming world. Players may still force improved security and theft recovery by making clear to platforms that they won’t tolerate lax security measures. Through communications with administrators and popular gaming forums, players can voice how important their virtual assets are. 

The prevention, investigation, and prosecution of in-game asset theft present complex challenges. While virtual assets increasingly accrue greater real-world value, they have yet to widely achieve the same status as real property in the eyes of the law. Due to the popularity of online games and thriving real-money marketplaces for virtual assets, theft of virtual property is unlikely to go away anytime soon. While gaming platforms have taken the initiative and implement some measures to protect their users’ property, the onus of protecting digital assets falls primarily on the players themselves. For gamers, the next time you spend time and energy building your prized skins, weapons, supplies, etc. be sure to build legitimate protections around all your valuable property that exists online. 

Gamma Law is a San Francisco-based firm supporting select clients in cutting-edge business sectors. We provide our clients with the support required to succeed in complex and dynamic business environments, to push the boundaries of innovation, and to achieve their business objectives, both in the U.S. and internationally. Contact us today to discuss your business needs. 

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