The Turkish Twitch Money Laundering Scandal
Dozens of Turkish esports players and top Twitch streamers using the Twitch.tv service are believed to be involved in a money laundering scandal that threatens to decimate the Turkish esports scene.
The scam is believed to have involved 300 people using stolen credits cards to donate to Twitch streamers in the form of Twitch ‘bits’. Once the streamers have received this money, they then give back a percentage of the donation to the fraudster, keeping the rest for themselves.
Additionally, scammers have been using Bots to ‘watch’ advertisements from the streamers to increase their bits payments and to donate them.
The news is another blow for Twitch just after news of a hack of streamers data on the service.
Riot Games Turkey Expected To Take Action
The news broke at the weekend when Jake Lucky tweeted about how:
“After Twitch’s massive payout leak, people noticed several smaller streamers making absurd amounts of money from bits.”
He then explained how the money laundering system was being used on Twitch using Bits and the details of stolen credit cards.
In response, Riot Games Turkey has yet to make an announcement about any bans, although that is surely only a matter of time.
Instead, Riot Games country manager for Turkey, Erdinc Iyikul commented on Twitter:
“We are aware of the ongoing situation and following closely. Due to the sensitivity of the issue, we can only decide on any actions to take based on the necessary investigations from relevant authorities. We haven’t taken any action yet or shared any information around our plans.”
Professional Players Admit To Participation
It wasn’t long after the story broke that a number of high-profile professional players and streamers admitting that they were involved, although some maintained their innocence and others stated that they were coerced into taking part.
Players such as LEGOO, deNC and Logicman are amongst those that have admitted that they have been involved in the scandal to some extent.
LEGOO confirmed that he had made around $2,000 from the scheme and Logicman admitted his involvement, but did not disclose how much he had benefitted from the scheme, instead, he indicated that he would no longer return to streaming.
In addition, both players have resigned from their positions as VALORANT professionals for Turkish esports team BBL Esports.
Intermediary
More worrying though is the admission that deNc has admitted to serving as an intermediary between the scammer’s main contact, who was initially called Kojou (although he has now since deleted that name).
“I was told ‘Bro, I have arranged a very good job for you. They will watch advertisements from America, earn bits and send them to you. Then we will split it between us, it’s completely legal.” Stated LEGOO in a Twitlonger post.
“At that time, I was not earning any money from streaming or esports. And at the same time, I was running the coffee house and truck for 12-13 hours a day. Is it that easy to make money? I jumped at the offer like and idiot and said ok,” he said.
“Later on, when I realized that the bits were coming anonymously, I became suspicious and wanted to quit. But since I was on the rise at the time and the person who had got me into it had leverage on me, even though I told the person many times I didn’t want to continue, I was forced to do it.”
All three players have denied knowing that the scheme was illegal prior to being involved, a fact that seems to have been corroborated by two anonymous players also involved who also made similar assertions.
However, the fallout from the debacle continued on Monday with BBL Esports announcing a number of their contracts with streamers and professional players had been terminated with immediate effect, as well as three academy players being released.
With the Turkish Parliament now getting involved, and the talk of players not just facing sanctions from Twitter and Riot Games, but potential legal ramifications, this is an issue that has the potential to decimate the Turkish esports scene.
It is also a rare, documented case of fraudsters attempting to launder money using a currency developed by a site. Other frauds are more commonly based on rigged esports betting involving match fixing or individuals trying to cheat a game through a hack or cheat.
One thing is for sure, the fallout from the Turkish Twitch scandal is only beginning.
Since: August 10, 2015
