Case Study
Emerging virtual reality (VR) technologies like non-fungible tokens (NFTs), multiplayer gaming and the metaverse have challenged law enforcement’s ability to find and stop criminal activities online. Largely unregulated, malign actors have used these technologies to their advantage as governments struggle to keep pace with their development.

Non-fungible tokens (NFTs) are unique dentifiers stored in immutable blockchain ledgers, and function as certificates of ownership for virtual assets, typically artwork or texts. They represent digital ownership, however the use of NFTs as conduits for real-life money laundering is aided by their digital nature. In 2022, European law enforcement has made great strides in adapting existing digital operations to the advent of blockchain and NFTs. In February, Her Majesty’s Revenue and Customs announced the First seizure of NFTs by U.K. law enforcement. Three pieces of digital art were identified and seized as part of an investigation into a $1,9M value-added tax fraud scheme. In March, the Cybercrime Team of the East Netherlands Police seized NFTs as part of an “investigation into the trading of private data.” These NFTs were extracted from devices located during home searches of two suspects. Finally, in May the East Flanders Federal Criminal Police (Belgium) conducted a similar operation and seized NFTs valued at 26.000€ during a home search as part of a money laundering investigation.

Multiplayer gaming has grown in popularity since the COVID-19 pandemic began and has been used by drug traffickers in North America as a recruitment tool and a way to contact buyers. While not yet documented in Europe, the first seizure stemming from recruitment via online gaming occurred in November 2021 at the U.S.- Mexico border. During a routine vehicle inspection, U.S. Customs and Border Protection seized 60 kilograms of methamphetamine from a driver in Arizona. The driver was befriended by a recruiter on Grand Theft Auto’s (GTA) multiplayer online platform, and was promised payment of $2.000 if she took a bus to Mexico and drove a car pre-loaded with the methamphetamine into the U.S. The driver was arrested for conspiracy to import and sell methamphetamine, and a criminal investigation is ongoing. This seizure followed several attempts by the Cártel del Noreste to recruit minors in Mexico as runners and lookouts using GTA’s multiplayer online platform in September 2021.

The metaverse is an enhancement to the internet we use today. It functions as an interconnected network of immersive, three-dimensional worlds which users access in real time through VR. Users rely on headsets and handheld sensors to interact, and blockchain technology that facilitates transactions of value and data storage. Individuals, using avatars, can engage in a range of everyday activities, from shopping for NFTs of shoes at a virtual store to attending business meetings. The metaverse allows users to do in VR nearly everything they can do in real life. Despite how fast-growing the metaverse is, it is still largely unregulated due to being such a new technology. In June, Europol highlighted interactions of material value in the metaverse as being “underpinned” by blockchain-based cryptocurrencies and NFTs, raising issues of ownership and criminal misuse. Initial concerns of illegal behavior including sexual harassment and sale of illicit drugs have come to light, leaving it to be only a matter of time before larger issues of organized crime and trafficking emerge in the metaverse.