

EVE Online Investment Scam Revealed - gregtudor
http://www.phaserinc.com/index1.html

======
aptwebapps
This isn't the first time this happened. I remember this story:

[http://slashdot.org/story/06/08/23/1918246/EVE-Online-
Rocked...](http://slashdot.org/story/06/08/23/1918246/EVE-Online-Rocked-
by-700-Billon-ISK-Scam)

which was funny because the guy basically just ran a 'bank' where you just
gave him the ISK in game. It was a dead-simple Ponzi, pay interest out of
(some of) new depositors' cash.

And then when a lot of people started trying to point out that it was most
likely a scam, he pretended to be offended and said, "If you're going to call
me a scammer I might as well take the money." And he did.

Then he proceded to buy a really fast ship and repeatedly bounty himself for
lulz.

This is all what I remember from reading about it at the time, I've never
played, myself.

------
iwwr
So they got around 1 trillion ISK, or around $21K worth of game-time cards (30
days each). For comparison, it costs around 80 billion isk to build the
largest ship in the game. For that money they can pay for a large-ish military
campaign lasting 30 days or so.

This ISK would be hard to launder back into real money, as CCP does not allow
the conversion of ingame -> real (though the opposite route is allowed).

~~~
alnayyir
>This ISK would be hard to launder back into real money

Not true, I know of several Russians that live off the game with far less ISK.

~~~
nazgulnarsil
reddit AMA?

~~~
alnayyir
Yeah right, last thing they need is people inquiring/crowding into their
livelihood. They didn't like me very much anyway.

I was a merc paid to fuck up their operation by enemies of one of their
allies.

~~~
DrJ
how many degrees of separations is that?

~~~
alnayyir
Not that many. The Russians were providing virtually the only capital support
the antagonist had at the time so harassing them and shutting down their
supply chain and income sources made a _lot_ of sense.

Our small team ops were effectively force multipliers in terms of how many
capitals we disabled or harmed the operation of.

------
ericHosick
I think there is a lot of good to come from things like this in a game like
EVE (I do play from time to time). One is that hopefully some of those 4252+
people will have leaned to be more careful in the real world.

------
yllus
Seems rather pointless. To provide a legitimate service for 8 months and then
abscond with the money because there are no legal consequences isn't much of a
challenge, experiment or lesson to anyone.

The only surprise is that they waited 8 months instead of 8 weeks to do it. (I
would have rewarded a few points if they waited 8 years.)

~~~
ploxination
Pointless? They got 1 trillion ISK.

~~~
yllus
In exchange for 8 months of at least moderate effort. Two people couldn't have
come up with $21,000 in earnings over 8 months? (The $21,000 figure taken from
the comment above me.) And they could have made that money in non-virtual
currency that they could have used outside the game.

If this was to run an experiment about greed or investor naivety that would be
another thing, but that doesn't seem to have been the case here.

~~~
Fargren
They did it while playing a game. And there's a certain thrill in scamming
people, certainly.

------
Iv
This already happened several times over the course of EVE's history. Ponzi
schemes are frequent and occasionally the succeed in epic proportions. I don't
understand why people keep falling for these. : every two years or so it is
mentioned.

~~~
JonnieCache
_> I don't understand why people keep falling for these._

The same reasons people fall for them in real life.

~~~
Iv
I must say I reacted in the same way when I read about Madoff. The fact that
people who are supposed to inspect investments would fall for such a scheme
was one of the first nails that was put in the esteem I had for economy
specialists.

~~~
untog
The Madoff case is a little different because Madoff himself had a tremendous
reputation. People weren't throwing their money at some shady anonymous
figure, he was supposed to be incredibly successful.

Still unwise of course, but a little more understandable.

~~~
kahawe
But he did not have that name before he started his scheme, right? Same with
all the EVE bank scams... none of them were all that famous and started "from
scratch" and at first just baited people with normal operations.

The difference is that Madoff never EVER had any real business to begin with
and basically just distributed money around and made sure enough was coming in
to cover it.

------
starpilot
So they created an in-game mutual fund paying weekly interest? Is that all
there was to the scam? Maybe I'm missing something, but the site to newcomers
doesn't explain what they _did_ to convince players to invest in them.

~~~
dkokelley
_"Maybe I'm missing something, but the site to newcomers doesn't explain what
they did to convince players to invest in them."_

Promote it in local chat windows until you get a few bites, and then let "word
of mouth" help grow you organically. The first few people were the brave ones.
They were rewarded well in order to offer a bit of social proof to other
players. If your friend did it and doubled his money, it must be safe! After
all, what kind of scammers would actually give any money back?

------
wccrawford
I assume this was a Ponzi scheme that worked out really well. Whether or not
it's 'allowed' or 'legal', I won't touch.

What I learned from this is that if you have a problem with a company, and
it's not resolved, make sure you write it on the internet in a place that
won't disappear. For others to see. At best, you might get 'fixed' to shut you
up. At worst, others have a warning to go by.

~~~
jameskilton
Yes, a very good ponzi scheme, and yes this is 100% legal and allowed in the
world of EVE. Frankly this is one of the things I love about this game, it
allows people to show their true colors. It's also the reason I don't play it.

~~~
eli
IANAL, but regardless of game rules that sounds a lot like wire fraud.

~~~
goatforce5
Would you also suggest Monopoly players be indicted for operating unlicensed
banks?

~~~
tsunamifury
Who are you playing monopoly with? Last time I checked you don't have to pay
in real cash to get your funny money.

~~~
jrockway
Actually, you do. A set of Monopoly money costs about $20 (and includes a free
board).

~~~
spc476
Unless you find the PDFs of the money: [http://www.zieak.com/2008/08/19/print-
your-own-monopoly-mone...](http://www.zieak.com/2008/08/19/print-your-own-
monopoly-money/)

------
Tichy
Too bad that EVE Online only seems to get into news for that kind of thing. I
haven't played it, but I occasionally dream about the possibilities of less
regulated MMORPGs, which EVE seems to be.

~~~
tzs
It also gets into the news for people doing awesome non-scammy things. Take
the assassination of Mirial for instance:
[http://www.computerandvideogames.com/180867/features/murder-...](http://www.computerandvideogames.com/180867/features/murder-
incorporated/?site=pcg)

------
prodigal_erik
Financial planning in a game? Is this semi-required busywork or are most
players having fun with it? Why this and not paper trading (or real)
investments outside the game?

How much work would it take to turn EVE into a Libertopia? Could an MMO like
this exist without griefing and scams being so common?

~~~
garethsprice
Isn't a libertopia (reading as a libertarian utopia) a place where griefing
and scams are able to run rampant, the thought being that the free market will
sort out the issues in the long run? Of course people get hurt in the short
term, but that's just natural selection at work...

At least, that's my understanding of a pure libertarian philosophy - still not
sure how the philosophy gets around the people at the bottom of the social
pile getting crushed, or even that it tries to.

Running a virtual investment vehicle (legit or scam) actually sounds quite fun
for a certain type of person. I find the mechanics of scams, cracking, social
engineering etc. quite fascinating but have no desire to actually con people
out of money. Running a ponzi scheme in a virtual game world sounds like a
fascinating way to see the mechanisms at work - same with the whole virtual
currency space in general.

Seems like it would also be of interest to economists and social scientists -
previously it's only been possible to do postmortems or theoretical
discussions of certain economic issues (truly libertarian societies, ponzi
schemes, etc.) but being able to watch them form in such a simple world must
be quite exciting for researchers in that area.

~~~
anigbrowl
As it happens, CCP (the company that runs the game) employs an economist who
advises them on how to keep the in-game economy stable (so that commodity/game
item prices are not subject to so much volatility that people give up and stop
playing), and he also produces quarterly reports for the players on how the
economy is functioning. There have been some academic papers written on
virtual economies, it's an interesting theoretical tool.

------
ubercore
Can't you exchange ISK for dollars? How is that not fraud, in the real world?

~~~
sp332
Game companies make absolutely sure that in-game currency isn't the same as
IRL money, because then players would have to declare in-game property on
taxes etc. and the game servers would be like banks or something. It's much
better for everyone if you can't do that :)

~~~
Iv
And yet it is possible to exchange ISKs to BTCs, then dollars.

~~~
alex_c
That's only a step up from barter, though. You could exchange ISK for live
chickens if you could find someone interested.

~~~
Iv
The liquidity of BTCs is notoriously better than that of live or dead
chickens...

------
rajpaul
can someone define these for me? ISK, PVP.

~~~
esrauch
ISK is the in-game currency. PVP means "player vs player", its where two human
players are competing against eachother- contrast with PVE (player vs
environment) where a human player is opposed by computer controlled AI
enemies.

------
Symmetry
I wonder how much this was directly inspired by Madoff?

~~~
mattmanser
This has been done many times before in game.

The note worthiness of it is the amount and that they've explained how they
played the system without being immediately accused of running a scam.

