Interesting Information Week article here: China Bans Gold Farming
Trading virtual goods for real money has been banned in China, putting hundreds of millions of dollars in economic activity at risk.
By Thomas Claburn
InformationWeek
June 29, 2009 02:20 PMIn addition to its ongoing crackdown on Internet porn, the Chinese government has declared that virtual currency cannot be traded for real goods or services.
Virtual currency, as defined by Chinese authorities, includes “prepaid cards of cyber-games,” according to a joint release issued by China’s Ministry of Culture and Ministry of Commerce on Friday.
“The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services,” the Ministries said.
The Chinese government estimates that trade in virtual currency exceeded several billion yuan last year, a figure that it claims has been growing at a rate of 20% annually. One billion yuan is currently equal to about $146 million.
Article continues: China Bans Gold Farming
Can anyone explain why it’s in China’s interest to do this? I’ll certainly enjoy a decrease in spam from gold sellers, and from phishing and keylogger scams funded by gold sellers, but China isn’t passing this law for my sake. What’s their reason for doing it?
I remember seeing some interesting comments from someone working in the financial district regarding money laundering. He was saying that people had begun exploiting gold selling as a way of unloading dirty money for in-game currency, then later selling the gold to legit businesses for untainted funds. He implied that it was almost impossible to trace this money back to its original source, making it very hard for Chinese law enforcement to figure out who’s evading taxes or profiting from illegal activity (without paying out to the appropriate authorities).
I’d really like to find that comment again for its exact text.
I’m curious why this happened. I asked my friend and he figures it’s a currency issue but I figured it would be a drop in the bucket. Any idea why the government has made this decision?