The truth is even more bizarre than you suspect.
By Damon Reece on November 19, 2012 at 5:18 pm
As you may (or may not) know, Valve’s free-to-play shooter Team Fortress 2 has a thriving economy behind all those piles of hats, fuelled solely by the sale of items from the in-game Mann Co. store. It’s actually quite complex, and surprisingly vast — millions of dollars worth of items exist in player backpacks, and the most wealthy players can have tens of thousands of dollars sitting in their backpacks in hat form.
Warning: This article has a lot of jargon in it, though I’ll try to keep it as simple as possible for those who aren’t familiar with TF2’s trading scene. Just keep in mind that keys are worth ~$1.25, and Earbuds (or buds, as they’re colloquially known) are worth $32. These items are often traded on TF2 Outpost, a popular Steam item trading site.
This economy also (conveniently) allows Russian criminals to launder money, much like you’d see in a low-budget ‘60s noir flick — except a lot less exciting.
Of course, there’s a hero in the story too: Reddit user base1024 (also known as base64) runs a site called TF2Finance which tracks the values of ingame commodities by automatically scanning high-value trades. In a post on the SteamRep forums last Monday, he explained that he’d discovered evidence of huge amounts of Mann Co. Crate Keys being injected into the economy — over 5000, in fact.
These keys, purchased by Russian accounts using (presumably) stolen credit cards, were then quickly used to trade for large amounts of Earbuds at high prices (30 keys, as opposed to the normal 26-key market price). Here’s where base64 noticed that something was amiss: his website logged an abnormal amount of Earbud trades – four times as many as usual. After a little more investigative work, he found that a ring of traders had been buying Earbuds at the aforementioned extreme prices and then immediately selling them for 700 rubles each ($22 USD, $10 below the normal selling price for buds).
In itself this was suspicious behaviour, but base64 took the investigation one step further by tracing the keys to their original purchaser. Upon looking inside the inventories of the purchaser and the users on his friends list, base64 found a large amount of both keys and Mann Co. Store Packages, free items which are granted by Valve for every $20 spent in the store. The existence of these items was evidence enough of large-scale key buying, but the rabbit hole went even deeper…
With further investigation came more revelations: each of the users was a member of a Steam group called “DIE Friend”, with a start date of September 18th, 2011. I’ve spoken to many knowledgeable folk in the trading community, who claim that this sort of trading has been occurring for a while now, and the start date of this group only serves as more evidence to support this timeframe – all in all, at least ten accounts in the group have been definitively proven to be engaging in suspicious buying behaviour. base64 summarized his findings from the group on the forum:
- We all know that a Mann Co Package is granted for every USD$20 of purchase from Store. They had 14-17 Packages, so they “spent” USD$280-$340 on Keys using each account.
- All the involved accounts in this group were created at least months ago.
- The accounts were Free-to-Play (Per my replication of Valve’s database in May 23, 2012)
- No weapons/hats stayed in these backpacks.
- They sometimes open the Mann Co Packages, or just give them away to Buds sellers.
- Usually no Keys/Buds were left behind.
- The proven accounts NEVER signed in at TF2 Outpost. However, they do look for Buds sellers there.
- They refer each other to the largest Buds sellers on Outpost
It’s pretty damning stuff. The implications of this sort of activity are fairly dire too: with a huge amount of keys being injected into the economy, item values are slowly dropping, and some traders are beginning to speculate that a market crash is looming. The uncertainty isn’t just conjecture, either — according to a previous article on his site, base64 believes that the value of keys (in USD) is slowly depreciating, and it’s very possible that the injection of “stolen” keys into the economy is helping this along.
So why would anyone do this? It’s estimated that the credit card thieves are making around a 33% return on the money they put into the system: for the thief, every $300 worth of keys they buy will net them about $100 of near-untraceable real-world cash. As a money-laundering scheme it’s surprisingly simple, and as an inside observer, it’s absolutely fascinating to watch how the macro-economy of TF2 reacts to these events. I’ll be paying very close attention to how the situation develops, especially in regards to Valve’s reaction to this sort of activity.
base64 sums it up best:
A group of Russians bought over 5000 keys from the Steam Store today using illegitimate credit cards, and bought a few hundred Buds from TF2 Outpost at a ridiculous price of 28-30 Keys (The average yesterday was 25.5 Keys). They have been doing this for quite a long time and their activity today is alarming.
I’d like to thank base64 for the time he spent discussing this with me — he really knows his stuff!
Valve has not responded to my request for a statement regarding the matter.