Indonesia’s massive gaming market, led by Mobile Legends, Free Fire, and PUBG Mobile, generates billions and functions as a digital economy where assets and accounts hold real value. Scholars in the P/CVE field have identified this wide-reaching global arena as one ripe for exploitation by violent extremist actors to exploit funding gaps. Specifically, virtual currencies, transfers, and resale markets may enable money laundering and terrorist financing. This Insight explores how Indonesian, Asian, and global authorities, together with tech firms, can address this gap by strengthening systems and preventing potential exploitation.
In-Game Money and Indonesia’s Expanding Gaming Scene
Indonesia’s gaming market reached $3.11 billion in 2023, driven by a young population, rising smartphone use, and a preference for mobile gaming. By 2026, Indonesian video game revenue is projected at $1.43 billion, with the broader Southeast Asia market hitting a massive $6.88 billion.
In-app purchases and gaming currencies for skins (virtual goods that alter a player’s character, weapon, or other in-game elements without impacting gameplay), battle passes, and virtual goods are rising. Mobile gaming dominates the gaming market in Indonesia, generating the most revenue, with 100+ million Indonesian gamers and 70% smartphone penetration. Better domestic digital infrastructure, affordable smartphones, and wider acceptance of digital payments drive growth. Indonesia’s strong digital payment market also supports this trend. Spending grows through localised hits like Mobile Legends, Free Fire, and PUBG Mobile, alongside freemium models pushing microtransactions. Gen-Z and Millennials drive adoption and spending. Esports further fuel growth, boosting in-game currency use tied to competition and digital events.
In-game currency is virtual money used in online games to buy items, upgrades, and features that enhance gameplay. In Indonesia, games like Mobile Legends, Free Fire, and PUBG Mobile use such currencies, purchased with real money, to unlock skins, weapons, battle passes, and other items. These currencies are central to freemium games, where the base game is free but customisation and progression require payment.
In-game currencies differ by name and type, but all serve as the medium for transactions within games. Players buy them with Indonesian rupiah (IDR), linking real-world money to the virtual world. Gaming companies localise for Indonesia by pricing in rupiah and supporting local wallets and banking systems.
In-game currency is stored as a variable tied to the player, and balance updates occur through arithmetic operations when earning or spending. System checks funds before transactions, saves balances locally or on servers, and deducts prices when granting items. Triggers (predefined conditions or events that prompt specific actions within the game) that then award in-game currency for gameplay, while cloud sync secures data and manages multi-device use. Real-money purchases convert to virtual currency through exchange rates, with accounting controls and security measures preventing duplication or unauthorised changes.
In-game economies revolve around earning and spending virtual currency. Players gain soft currency through regular gameplay for routine purchases, and hard (premium) currency by spending real money for exclusive items or faster progression. Prices for items, upgrades, and services are set by each game, which must balance income and spending to avoid inflation or deflation. Currency sinks like upgrades, repair fees, or limited-time offers help maintain stability. Economies drive engagement by rewarding gameplay and encouraging spending with exclusive or time-limited items. Some games include player-driven markets where users trade assets, affecting supply and demand. Real money is converted into premium currency via localised payment methods (such as digital wallets or bank transfers in Indonesia). Premium currency is then spent on cosmetics (visual items like skins or outfits that change appearance but don’t affect gameplay), power-ups, or extra features, with bundles and discounts offered to increase revenue.
In-game currencies often have confusing exchange rates and bundled pricing that cause players to overspend, especially younger users or those with stored payment details. Alongside this, scams, phishing, and account theft are increasing, with stolen items and currency resold for real money. Players usually have little recourse from game companies, creating significant risk.
Terrorist Financial Exploitation of Online Gaming
Online games like Mobile Legends, Free Fire, and PUBG Mobile allow trading of in-game currencies and items that can be sold for real money. Jihadists exploit these systems to launder funds across borders, often starting with stolen credit cards to buy virtual assets. Microtransactions provide fast, anonymous transfers, creating a clean layer that hides illicit sources and supports “low-cost” terrorism. As one example shows, the Islamic State remains a high threat in this space, using social media and gaming platforms for propaganda, radicalisation, and fundraising, while primarily moving money through unregistered cash networks and mobile services.
Jihadist groups launder money through gaming by buying in-game currency or items with stolen funds, moving them across multiple accounts and platforms to obscure origins, then reselling them on third-party markets or official exchanges. They inflate balances, create fake trade histories, and build complex transaction webs to hide trails. Eventually, the assets are converted back to fiat currency, appearing as legitimate income. For example, Linden Dollars in Second Life can be exchanged for USD. For context, Second Life, developed by Linden Lab in San Francisco, is a multiplayer virtual world where users create avatars, interact, and shape an expansive 3D environment, blending social networking, creative building, and simulation, unlike typical MMORPGs.
Second Life (SL) uses the Linden Dollar (L$), obtained via in-world purchases or SL’s Linden Exchange with fiat currency. Users can buy and sell virtual goods, tip, and access services. Each SL account holds balances in L$ and USD, and the former can be converted to the latter through the Linden Exchange. In 2021, SL reported 200k daily users across 200 countries and a GDP equivalent of $600M—larger than some nations. Such monetary flows raise risks of misuse by illicit groups. Yet, SL is only one platform, not the largest globally or in Asia/Indonesia.
Extremist groups have used several methods of laundering money via video games. In Oct 2019, a Vice report revealed that loot boxes (virtual game items containing randomised rewards) in CS:GO were exploited: players purchased keys with real money, traded boxes and items on the Steam Marketplace, and 90% of such transactions were linked to laundering. Valve shut down the marketplace.
Carding was another method. In January 2019, cybersecurity firm Sixgill found criminals used Fortnite by topping up accounts with stolen credit cards, buying skins/weapons, then reselling them on third-party markets or the dark web. In Oct 2019, RUSI reported criminals using stolen cards to create Apple IDs, purchase in-game items in titles like Clash of Clans and Marvel Contest of Champions, and resell for fiat.
Finally, criminals have laundered funds via convertible in-game currencies. By creating multiple fake accounts, cycling assets among them, and later cashing out through banks and ATMs, they obscured the money trail, making tracing extremely difficult.
These cases show how illicit groups exploit the digital realm, especially in-game currencies and economies. Terrorist groups also use online gaming for recruitment, propaganda, fundraising via streaming, and money laundering through virtual economies. This creates ongoing risks of financing terrorism through in-game currency exchanges.
Indonesian and Asian Analysis
Indonesia faces high risks of terrorist financing (CTF) and money laundering. This is because the regulation of virtual and in-game currencies in Indonesia remains weak, leaving these sectors lightly monitored by authorities. The anonymity and ease of transferring in-game currencies create significant opportunities for funnelling illicit funds. The fast-growing digital and gaming economy, projected to reach USD 6.3 billion by 2033, enables millions of transactions through retail top-ups (Indomaret, Alfamart) and digital channels (e-money, mobile banking), with these transactions largely revolving around gaming, as millions of Indonesians use in-game currency daily. Many platforms lack (Know Your Customer) KYC and real-time checks, leaving room for abuse by criminals and terrorist groups. Law enforcement struggles to trace flows due to poor coordination and bureaucracy. Expanding digital wallets and payment systems often lack AML/CTF integration, increasing risks in converting real money to in-game currencies.
Terrorist financing via digital platforms is not limited to Indonesia but affects the wider Asian region. Southeast Asian groups use cryptocurrencies and online payment systems for fundraising, with potential spillover into gaming ecosystems due to anonymity. UNODC and regional law enforcement warn that virtual assets may be increasingly exploited in ASEAN. In Central Asia, groups have used digital wallets and cryptocurrencies (for example, Bitcoin and Tether) for funding, sometimes through encrypted communications, with money sent abroad to Syria and Afghanistan. South Korea has arrested individuals transferring terrorist funds through cryptocurrencies. While most cases involve crypto rather than in-game currencies, the same risks apply given fungibility and anonymity. Many Asian states lack harmonised AML (Anti-Money Laundering) frameworks for digital assets, leaving gaps that could extend to gaming platforms and create significant vulnerabilities for covert terrorist financing.
Indonesia’s gaming community engages globally through apps like Mobile Legends, Free Fire, and PUBG Mobile, with virtual currencies transferable across borders (for example, from Bandung to Karachi). This cross-border movement creates jurisdictional challenges for Indonesian law enforcement, as terrorists could exploit the anonymity of gaming transactions to move funds undetected. Illicit funds can be converted into virtual currency, transferred between accounts, and evade tracking. Despite efforts by Indonesia’s financial sector, many gaming platforms and virtual goods markets remain lightly regulated, with weak KYC and monitoring, allowing potential terrorism financing. Misuse of in-game currencies can fund recruitment, propaganda, or operations domestically or abroad, threatening national security and financial system integrity. Regulators like OJK (Indonesian Financial Services Authority) and PPATK (Indonesia’s Financial Intelligence Unit (FIU) are enhancing AML and counter-terrorism financing measures, but enforcement is difficult due to the fast-evolving virtual gaming economy and the need for robust surveillance and international cooperation.
With over 100 million registered gamers, Southeast Asia’s gaming market generates massive daily in-game transactions in currencies, skins, and virtual goods, creating high-volume financial flows that can be exploited to move illicit funds covertly. Rapid market growth, increased in-game spending, widespread mobile gaming and digital payments, multiple platforms and localised versions, and social/esports features amplify these risks. Terrorist groups can use cross-border virtual currencies to funnel resources into malicious activities, posing significant challenges to Indonesian and international law enforcement and increasing the threat of terrorist financing.
Plugging the Gap: How Indonesia Can Stop Game-Based Terror Funds
Indonesia is addressing terrorism financing risks in digital assets through stricter financial oversight. The OJK is tightening AML and CTF rules, focusing on KYC and transaction monitoring for virtual currencies, including in-game assets. Recent developments concern a new law passed in Indonesia regulating the gaming industry in 2024, called the Presidential Regulation Law No. 19 of 2024, which outlines a roadmap for the growth of the gaming industry while mandating safeguards against illicit activities within the sector. New 2024–2025 policies require gaming platforms and virtual asset flows to comply with financial intelligence standards. Collaboration with Financial Intelligence Units (FIUs), the Financial Action Task Force (FATF), and regional partners strengthens cross-border investigations, while law enforcement works with gaming companies and payment providers to detect and block suspicious transactions.
International authorities recommend AML/CTF compliance for virtual assets, including convertible in-game currencies (FATF), and consumer protection and transparency standards (EU and others), which Indonesia considers in its regulations. Cross-border information sharing enables coordinated action against digital financial crimes in gaming, monitored by bodies like Interpol and Egmont Group, including emerging risks in esports and virtual asset platforms.
Gaming companies can reduce the risk of in-game currencies being used for terrorist financing by implementing AML/CTF compliance aligned with FATF standards. Key measures include: robust KYC verification and customer due diligence, monitoring transactions for suspicious patterns or large cross-account transfers, using AI and analytics to detect unusual activity, reporting to financial intelligence authorities, restricting currency conversion/withdrawal without verification, cooperating with regulators and law enforcement, participating in industry forums, employing safeguards against fraud and account abuse, limiting multiple accounts, training staff on AML/CTF risks, and educating players on safe practices. For example, Second Life registers its virtual currency providers as money service businesses under AML regulations.
These measures are necessary because stronger oversight of in-game currencies and economies is essential to prevent illicit activities, particularly terrorist financing, and to enhance Indonesia’s ability to uncover hidden networks and disrupt such funding.
—
Mochammad Jose Akmal is a recent graduate with a Bachelor’s degree in Government Science from Universitas Diponegoro, with a strong foundation in political analysis, journalism, and international affairs. He has gained experience with prominent institutions, including the European Union Delegation in Indonesia and Kontan Indonesia (investment and economic news), and has contributed to global publications such as International Policy Digest. Jose specializes in strategic communication, foreign policy, and public diplomacy, bridging policy research with real-world impact.
—
Are you a tech company interested in strengthening your capacity to counter terrorist and violent extremist activity online? Apply for GIFCT membership to join over 30 other tech platforms working together to prevent terrorists and violent extremists from exploiting online platforms by leveraging technology, expertise, and cross-sector partnerships.