According to several of my real life friends who have jobs in the financial sector, Second Life has a reputation in the UK-financial and computer professional industries as a haven for money laundering. About 10 seconds worth of research suggests this is total bunk.The official line is that amounts of about £25,000 (roughly US$50,000) constitute the bottom end for money laundering. This is easy to lose in the US$1.5 million that changes hands in Second Life daily (see Counting the coppers for daily information). This is true. It also ignores one rather critical element.
Let's pretend I'm a money launderer, or I need to launder some money. I have "dirty" money - perhaps I'm a thief, or I run an illegal gambling den. I want to take my money, pass it though some system and get as much "clean" money back as possible within a reasonable period of time. Therein lies the rub. You see, the Second Life LindeX exchange is also pretty stable, at about US$250,000 per day. If I push US$50,000 through that, what on earth would happen to the market?
Well, first up, I can't just buy US$50,000 straight off. In fact, without demonstrating a need and a pattern of behaviour that requires it, and providing extra information asking for an upgrade I can't trade more than US$5,000 per month - although over time I can increase that to quite sizable amounts - up to US$30,000 per day if I'm registered as an enterprise (source: LindeX Billing Limits). So, if I'm willing to take my chances with registering, I can just about get a high enough trading limit to launder my money every other day. So far I'm underwhelmed.
Second, LindeX just doesn't trade enough. If I try to pull US$50,000 out, or pump it in, the exchange rate would go all over the place, and so would the daily trading figures. I might believe I you could pull out US$5,000 a day for a few days without it massively changing the trading market, but I think you would be pushing your luck with that much. Let's say you can do US$2,000 a day. That means it takes basically a month to launder your smallest interesting amount of money, after registering for it. Is it really worth it?
