Can You Ever Regulate the Virtual World Against Economic Crime?

AuthorClare Chambers
PositionUWE, Business and Law
Pages339-349
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339
Can You Ever Regulate the Virtual World Against Economic Crime?
Dr Clare Chambers
UWE, Business and Law,
Clare.chambers@uwe.ac.uk
Abstract. The question of whether you can ever regulate the virtual world a gainst
economic crime is one which cannot be answered easily in practice or in theory. This paper
examines this que stion as pa rt of a much larger study into virtual economic crime. Economic
crime and money laundering are occurring in many virtual worlds and to prevent them would
have a positive impact on the negation of terrorist financing. However in order to prevent
economic crime, the legal jurisdiction of virtual worlds must first be established. The paper
examines the academic debate thriving between Internet separatist and inclusionist, outlining the
philosophical approach of the pap er in turn in order to discuss whether you can ever regulate
against economic crime in virtual worlds.
©2012 Clare Chambers.Published by JICLT. All rights reserved.
1. Introduction
The British Fraud Advisory Panel (FAP) has said “there is nothing virtual about online crime, it is all too real. It
is time the government took this seriously. ” 1The FAP has further opined that “money laundering is the obvious
risk. There will be a migration of fraudsters into these sites when they see all of the opportunities”. They
describe the virtual world as “a parallel universe with almost no external rule of law, no enforced banking
regulations or compliance, no policing and no government oversight”.
2
Similarly, Field Fisher W aterhouse Solicitors iterated that, “the law d oesn’t stop just because this is a virtual
world, but with its borderless nature, it may be challenging to determine whose laws apply. And there’s a culture
of anonymity, so it is often difficult to know what you are de aling with”.
3
So the question is can you ever
regulate virtual worlds against economic crime?
To begin, this paper it is important to draw the distinction between the Internet or cyberspace and virtual
worlds. Virtua l worlds can be seen as another layer of coding inside cyberspace. The terms virtual world and
cyberspace shall be defined and applied to the paper in the first section of t his paper.
To be able to ascertain whether laws can pervade the Internet and enter the virtual worlds, it must be
established whether you can ever regulate cyber space. There is a fruitful and rigorous academic debate as to
whether there should be separate regulation for c yberspace and thus virtual worlds, a separatist point of view that
virtual worlds laws should be distinct from real world laws or the inclusionist view that real world laws should
be applicable in cyberspace and virtual world too, given the real world affect and consequences these virtual
worlds have. The aim of the paper is to examine whether economic crime can ever be regulated against within
virtual worlds. The paper will be divided into three parts. T he paper begins by discussing the impact of economic
crime on the virtual world and how it is a present and current t hreat to not only the virtual world but the real
world too. Secondly, the paper provides an e xamination of the inclusionist and separatist viewpoints will be
undertaken. Thirdly, the paper will discuss the constraint s of control in both the real and t he virtual. Finally, the
paper will examine jurisdictional issues such as democracy and rule of la w of the virtual worlds. A caveat must
1
Fraud Advisory Panel. ‘Cyber Crime: Social Networking and virtual worlds’, Issue 4, October 2009.
http://www.fraudadvisorypanel.org/new/pdf_show.php?id=119 accessed 15 July 2010.
2
Id.
3
Id.

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