Pixelated Earnings: Terrorist Financing By In-Recreation Economies in Indonesia – International Community on Extremism and Expertise

Indonesia’s large gaming market, led by Cell Legends, Free Hearth, and PUBG Cell, generates billions and capabilities as a digital financial system the place belongings and accounts maintain actual worth. Students within the P/CVE discipline have recognized this wide-reaching world area as one ripe for exploitation by violent extremist actors to use funding gaps. Particularly, digital currencies, transfers, and resale markets might allow cash laundering and terrorist financing. This Perception explores how Indonesian, Asian, and world authorities, along with tech companies, can deal with this hole by strengthening programs and stopping potential exploitation.
In-Recreation Cash and Indonesia’s Increasing Gaming Scene
Indonesia’s gaming market reached $3.11 billion in 2023, pushed by a younger inhabitants, rising smartphone use, and a desire for cell gaming. By 2026, Indonesian video game revenue is projected at $1.43 billion, with the broader Southeast Asia market hitting a large $6.88 billion.
In-app purchases and gaming currencies for skins (digital items that alter a participant’s character, weapon, or different in-game components with out impacting gameplay), battle passes, and digital items are rising. Cell gaming dominates the gaming market in Indonesia, producing probably the most income, with 100+ million Indonesian gamers and 70% smartphone penetration. Higher home digital infrastructure, reasonably priced smartphones, and wider acceptance of digital funds drive development. Indonesia’s sturdy digital fee market additionally helps this development. Spending grows by localised hits like Cell Legends, Free Hearth, and PUBG Cell, alongside freemium fashions pushing microtransactions. Gen-Z and Millennials drive adoption and spending. Esports further fuel growth, boosting in-game foreign money use tied to competitors and digital occasions.
In-game foreign money is digital cash utilized in on-line video games to purchase objects, upgrades, and options that improve gameplay. In Indonesia, games like Mobile Legends, Free Fire, and PUBG Mobile use such currencies, bought with actual cash, to unlock skins, weapons, battle passes, and different objects. These currencies are central to freemium games, the place the bottom recreation is free however customisation and development require fee.
In-game currencies differ by title and sort, however all function the medium for transactions inside video games. Gamers purchase them with Indonesian rupiah (IDR), linking real-world cash to the digital world. Gaming firms localise for Indonesia by pricing in rupiah and supporting local wallets and banking systems.
In-game currency is saved as a variable tied to the participant, and steadiness updates happen by arithmetic operations when incomes or spending. System checks funds earlier than transactions, saves balances regionally or on servers, and deducts costs when granting objects. Triggers (predefined situations or occasions that immediate particular actions inside the recreation) that then award in-game foreign money for gameplay, whereas cloud sync secures information and manages multi-device use. Actual-money purchases convert to digital foreign money by change charges, with accounting controls and security measures stopping duplication or unauthorised adjustments.
In-game economies revolve round incomes and spending digital foreign money. Gamers acquire comfortable foreign money by common gameplay for routine purchases, and laborious (premium) foreign money by spending actual cash for unique objects or sooner development. Costs for objects, upgrades, and companies are set by every recreation, which should steadiness revenue and spending to keep away from inflation or deflation. Currency sinks like upgrades, restore charges, or limited-time presents assist maintain stability. Economies drive engagement by rewarding gameplay and inspiring spending with unique or time-limited objects. Some video games embody player-driven markets the place customers commerce belongings, affecting provide and demand. Actual cash is transformed into premium foreign money through localised fee strategies (corresponding to digital wallets or financial institution transfers in Indonesia). Premium foreign money is then spent on cosmetics (visible objects like skins or outfits that change look however don’t have an effect on gameplay), power-ups, or further options, with bundles and reductions provided to extend income.
In-game currencies usually have confusing exchange rates and bundled pricing that trigger gamers to overspend, particularly youthful customers or these with saved fee particulars. Alongside this, scams, phishing, and account theft are increasing, with stolen objects and foreign money resold for actual cash. Gamers normally have little recourse from recreation firms, creating vital threat.
Terrorist Monetary Exploitation of On-line Gaming 
On-line video games like Cell Legends, Free Hearth, and PUBG Cell enable buying and selling of in-game currencies and objects that may be bought for actual cash. Jihadists exploit these programs to launder funds throughout borders, usually beginning with stolen bank cards to purchase digital belongings. Microtransactions present quick, nameless transfers, making a clear layer that hides illicit sources and helps “low-cost” terrorism. As one example exhibits, the Islamic State stays a excessive menace on this area, utilizing social media and gaming platforms for propaganda, radicalisation, and fundraising, whereas primarily shifting cash by unregistered money networks and cell companies.
Jihadist teams launder money through gaming by shopping for in-game foreign money or objects with stolen funds, shifting them throughout a number of accounts and platforms to obscure origins, then reselling them on third-party markets or official exchanges. They inflate balances, create pretend commerce histories, and construct advanced transaction webs to cover trails. Ultimately, the belongings are transformed again to fiat foreign money, showing as authentic revenue. For instance, Linden {Dollars} in Second Life may be exchanged for USD. For context, Second Life, developed by Linden Lab in San Francisco, is a multiplayer virtual world the place customers create avatars, work together, and form an expansive 3D setting, mixing social networking, artistic constructing, and simulation, in contrast to typical MMORPGs.
Second Life (SL) makes use of the Linden Dollar (L$), obtained through in-world purchases or SL’s Linden Trade with fiat foreign money. Customers should purchase and promote digital items, tip, and entry companies. Every SL account holds balances in L$ and USD, and the previous may be transformed to the latter by the Linden Trade. In 2021, SL reported 200k each day customers throughout 200 international locations and a GDP equal of $600M—bigger than some nations. Such financial flows increase dangers of misuse by illicit teams. But, SL is just one platform, not the biggest globally or in Asia/Indonesia. 
Extremist teams have used a number of strategies of laundering cash through video video games. In Oct 2019, a Vice report revealed that loot bins (digital recreation objects containing randomised rewards) in CS:GO have been exploited: gamers bought keys with actual cash, traded bins and objects on the Steam Market, and 90% of such transactions have been linked to laundering. Valve shut down the marketplace.
Carding was another method. In January 2019, cybersecurity agency Sixgill discovered criminals used Fortnite by topping up accounts with stolen bank cards, shopping for skins/weapons, then reselling them on third-party markets or the darkish internet. In Oct 2019, RUSI reported criminals utilizing stolen playing cards to create Apple IDs, buy in-game objects in titles like Conflict of Clans and Marvel Contest of Champions, and resell for fiat.
Lastly, criminals have laundered funds via convertible in-game currencies. By creating a number of pretend accounts, biking belongings amongst them, and later cashing out by banks and ATMs, they obscured the cash path, making tracing extraordinarily troublesome.
These instances present how illicit teams exploit the digital realm, particularly in-game currencies and economies. Terrorist groups additionally use on-line gaming for recruitment, propaganda, fundraising through streaming, and cash laundering by digital economies. This creates ongoing dangers of financing terrorism by in-game foreign money exchanges.
Indonesian and Asian Evaluation
Indonesia faces high risks of terrorist financing (CTF) and cash laundering. It’s because the regulation of digital and in-game currencies in Indonesia stays weak, leaving these sectors calmly monitored by authorities. The anonymity and ease of transferring in-game currencies create vital alternatives for funnelling illicit funds. The fast-growing digital and gaming financial system, projected to reach USD 6.3 billion by 2033, allows tens of millions of transactions by retail top-ups (Indomaret, Alfamart) and digital channels (e-money, cell banking), with these transactions largely revolving round gaming, as tens of millions of Indonesians use in-game foreign money each day. Many platforms lack (Know Your Buyer) KYC and real-time checks, leaving room for abuse by criminals and terrorist teams. Regulation enforcement struggles to hint flows as a consequence of poor coordination and paperwork. Increasing digital wallets and fee programs usually lack AML/CTF integration, rising dangers in changing actual cash to in-game currencies.
Terrorist financing through digital platforms shouldn’t be restricted to Indonesia however impacts the broader Asian area. Southeast Asian teams use cryptocurrencies and on-line fee programs for fundraising, with potential spillover into gaming ecosystems as a consequence of anonymity. UNODC and regional legislation enforcement warn that digital belongings could also be more and more exploited in ASEAN. In Central Asia, teams have used digital wallets and cryptocurrencies (for instance, Bitcoin and Tether) for funding, typically by encrypted communications, with cash despatched overseas to Syria and Afghanistan. South Korea has arrested people transferring terrorist funds by cryptocurrencies. Whereas most instances contain crypto quite than in-game currencies, the identical dangers apply given fungibility and anonymity. Many Asian states lack harmonised AML (Anti-Cash Laundering) frameworks for digital belongings, leaving gaps that might lengthen to gaming platforms and create vital vulnerabilities for covert terrorist financing.
Indonesia’s gaming group engages globally by apps like Cell Legends, Free Hearth, and PUBG Cell, with digital currencies transferable throughout borders (for instance, from Bandung to Karachi). This cross-border motion creates jurisdictional challenges for Indonesian legislation enforcement, as terrorists could exploit the anonymity of gaming transactions to maneuver funds undetected. Illicit funds may be transformed into digital foreign money, transferred between accounts, and evade monitoring. Despite efforts by Indonesia’s monetary sector, many gaming platforms and digital items markets stay calmly regulated, with weak KYC and monitoring, permitting potential terrorism financing. Misuse of in-game currencies can fund recruitment, propaganda, or operations domestically or overseas, threatening nationwide safety and monetary system integrity. Regulators like OJK (Indonesian Monetary Providers Authority) and PPATK (Indonesia’s Monetary Intelligence Unit (FIU) are enhancing AML and counter-terrorism financing measures, however enforcement is troublesome as a result of fast-evolving digital gaming financial system and the necessity for strong surveillance and worldwide cooperation.
With over 100 million registered gamers, Southeast Asia’s gaming market generates large each day in-game transactions in currencies, skins, and digital items, creating high-volume monetary flows that may be exploited to maneuver illicit funds covertly. Fast market development, elevated in-game spending, widespread cell gaming and digital funds, a number of platforms and localised variations, and social/esports options amplify these dangers. Terrorist teams can use cross-border digital currencies to funnel sources into malicious actions, posing vital challenges to Indonesian and worldwide legislation enforcement and rising the specter of terrorist financing.
Plugging the Hole: How Indonesia Can Cease Recreation-Based mostly Terror Funds
Indonesia is addressing terrorism financing dangers in digital belongings by stricter monetary oversight. The OJK is tightening AML and CTF guidelines, specializing in KYC and transaction monitoring for digital currencies, together with in-game belongings. Latest developments concern a brand new legislation handed in Indonesia regulating the gaming trade in 2024, known as the Presidential Regulation Regulation No. 19 of 2024, which outlines a roadmap for the expansion of the gaming trade whereas mandating safeguards in opposition to illicit actions inside the sector. New 2024–2025 insurance policies require gaming platforms and digital asset flows to adjust to monetary intelligence requirements. Collaboration with Monetary Intelligence Models (FIUs), the Monetary Motion Activity Drive (FATF), and regional companions strengthens cross-border investigations, whereas legislation enforcement works with gaming firms and fee suppliers to detect and block suspicious transactions.
Worldwide authorities advocate AML/CTF compliance for digital belongings, together with convertible in-game currencies (FATF), and client safety and transparency requirements (EU and others), which Indonesia considers in its rules. Cross-border data sharing allows coordinated motion in opposition to digital monetary crimes in gaming, monitored by our bodies like Interpol and Egmont Group, together with rising dangers in esports and digital asset platforms.
Gaming firms can scale back the chance of in-game currencies getting used for terrorist financing by implementing AML/CTF compliance aligned with FATF requirements. Key measures embody: strong KYC verification and buyer due diligence, monitoring transactions for suspicious patterns or massive cross-account transfers, utilizing AI and analytics to detect uncommon exercise, reporting to monetary intelligence authorities, limiting foreign money conversion/withdrawal with out verification, cooperating with regulators and legislation enforcement, taking part in trade boards, using safeguards in opposition to fraud and account abuse, limiting a number of accounts, coaching workers on AML/CTF dangers, and educating gamers on protected practices. For instance, Second Life registers its digital foreign money suppliers as cash service companies below AML rules.
These measures are crucial as a result of stronger oversight of in-game currencies and economies is important to stop illicit actions, notably terrorist financing, and to reinforce Indonesia’s means to uncover hidden networks and disrupt such funding.
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Mochammad Jose Akmal is a current graduate with a Bachelor’s diploma in Authorities Science from Universitas Diponegoro, with a powerful basis in political evaluation, journalism, and worldwide affairs. He has gained expertise with distinguished establishments, together with the European Union Delegation in Indonesia and Kontan Indonesia (funding and financial information), and has contributed to world publications corresponding to Worldwide Coverage Digest. Jose focuses on strategic communication, overseas coverage, and public diplomacy, bridging coverage analysis with real-world impression.
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