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'50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

pcgamer.com

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Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#21

Post by ajross »

hashimotonomora wrote: post #11
chii wrote: post #7

Earlier quoted context omitted.

i suspect that steam was using a payment processor which identified that the coins were on a blacklist of sorts, and was not legitimately acquired (e.g., either stolen, or purchased with stolen money etc).

How does Walmart compare to that regarding purchases with ill-gotten cash?

Walmart (like all large retailers) spends a ton of effort trying to address e.g. laundering efforts with gift cards, actually. Google around for all the press releases about how they partner with the FBI, etc... They absolutely recognize that they're part of the laundering chain (and that this makes them liable to punishments under AML statutes, of course).

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#22

Post by mr_cyborg »

flotzam wrote: post #12
dahfizz wrote: post #10

Earlier quoted context omitted.

Have you ever heard the phrase "money laundering"?

Yes, and it's almost always used as a vague catch-all

There are some resources out there if you search for the stages of money laundering. Companies that have to fight money laundering have to know what it looks like and what they can do to catch it.

The stages are Placement, Layering, and Integration.

Here’s one source that may help explain:

https://www.stpaulschambers.com/stages-of-money-laundering-e...

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#23

Post by georgyo »

hashimotonomora wrote: post #11
chii wrote: post #7

Earlier quoted context omitted.

i suspect that steam was using a payment processor which identified that the coins were on a blacklist of sorts, and was not legitimately acquired (e.g., either stolen, or purchased with stolen money etc).

How does Walmart compare to that regarding purchases with ill-gotten cash?

Cash is completely fungible because there is no clear trace of money from one person to the next.

If someone steals 100k of cash, there is a very low probability that the serial number of those bills were recorded somewhere. And even if they were, you couldn't easily trace the money though complex systems.

Bitcoin on the other hand is a complete and open ledger. When these large heists that constantly happen, it is trivial to identify the transactions that happen afterwards.

Cash is actually anonymous and Bitcoin is only pseudo-anonymous.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#24

Post by AlexandrB »

space_rock wrote: post #13

This article is incoherent. Say what you like about Bitcoin but fraudulent payments are not possible. And yes Gabe is right that people in crypto are criminals running scam projects

Fraudulent payments are very much possible in the "buying stuff with a stolen credit card" kind of way. This is a much more common type of fraud than the "double spend" attacks Bitcoin protects against.

Bitcoin is only resilient to fraud only if you define fraud as "violating the rules of the blockchain". Any definition of fraud that involves meatspace is possible.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#25

Post by flotzam »

mr_cyborg wrote: post #22
flotzam wrote: post #12

Earlier quoted context omitted.

Yes, and it's almost always used as a vague catch-all

There are some resources out there if you search for the stages of money laundering. Companies that have to fight money laundering have to know what it looks like and what they can do to catch it. The stages are Placement, Layering, and Integration. Here’s one source that may help explain: https://www.stpaulschambers.com/stages-of-money-laundering-e...

But how does any of that apply to the supposed "Steam purchases with stolen credit cards by way of Bitcoin" scheme?

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#26

Post by lucb1e »

marcosdumay wrote: post #18
lucb1e wrote: post #6

Earlier quoted context omitted.

> * did someone try to send something other then bitcoin to a ₿ address? That would not even register right? Different coins are completely separate and it wouldn't even have registered anywhere and show up in the statistic. As far as I know the addresses are also distinct between coins (so it's not even physically possible) but there are so many now and I've been out of that world for a few years now so that might h…

If it was double spend, I imagine we would have heard the news. It's probably illegitimate money.

Why? Double spends are not hard to do from a technical point of view.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#27

Post by skybrian »

janandonly wrote: post #2

Unfortunately no details were given about what makes 50% of all bitcoin transactions “fraudulent” ? What does that even mean? * did someone try to send something other then bitcoin to a ₿ address? * did a client claim he payed and did the payment seem to fail on his end? * did a client not realise that you as payee also pay for the network fee? Nowadays these kind of problems would be easily prevented by using bitcoi…

Could people create fake game items and use Bitcoin to pay themselves as a way of converting it to cash? Is that a thing?

So the game item and the transaction are fake, as in they’re not actually there to play games.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#28

Post by woah »

Completely incoherent article. What does “fraudulent” even mean? Fraudulent credit card transactions for gift cards are common, because the gift card provides a way to cash out a stolen credit card number. But if a criminal has access to someone else’s Bitcoin, it’s already “cashed out”.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#29

Post by londons_explore »

paulgb wrote: post #8
janandonly wrote: post #2

Unfortunately no details were given about what makes 50% of all bitcoin transactions “fraudulent” ? What does that even mean? * did someone try to send something other then bitcoin to a ₿ address? * did a client claim he payed and did the payment seem to fail on his end? * did a client not realise that you as payee also pay for the network fee? Nowadays these kind of problems would be easily prevented by using bitcoi…

I remember a period somewhere in the 2010s where it wasn't uncommon to see a business experiment with accepting Bitcoin (as Steam did), before transaction fees made it impractical. Given the way people talk about LN, and the (quite understandable!) desire to avoid credit card transaction fees, why don't we see more businesses accepting it? (Asking this in good faith; I am admittedly ignorant about LN and have not tri…

There are just too few users on the LN. Of the whole world population, there is probably fewer than 1 in a million who could just scan a qr code and make a lightning payment.

Re: '50% of transactions were fraudulent' when Steam accepted Bitcoin for payments

#30

Post by flotzam »

swid wrote: post #20
kova12 wrote: post #3

What exactly does it mean "fraudulent transaction" in the context of bitcoin? It's not like you can use someone else's account number to purchase stuff.

The people who buy the game then resell the key on other websites for less than you find it on steam. They can buy many licenses when the game is on sale, so even if there is no chargeback, the devs can lose money through these methods. Otherwise it is still a money laundering tactic. Here’s a blog post where they talk about this eco system. https://factorio.com/blog/post/fff-303

OK that kind of makes sense: "fraud" = making geographical or time-limited price discrimination less effective
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