Turkish Streamers Colluded With Iran-Based Money Launderers: Amazon Subsidiary Twitch Should Take Action

Twenty-four hundred Turkish streamers have reportedly helped launder nearly $10 million for Iran-based credit card theft schemes through the Amazon subsidiary Twitch, a live streaming service that leads the world’s video game streaming market. The scandal underscores the need for corporations to develop more effective anti-money laundering measures, especially to protect against illicit financiers based in or working through permissive jurisdictions such as Turkey.

On October 29, Ahmet Sonuc, a Turkish internet celebrity whose Twitch channel has 1.7 million followers, exposed a scheme in which Iran-based credit card thieves laundered money with the help of Turkey-based Twitch streamers. To uncover the scam, Sonuc and other Turkish Twitch users investigated the Twitch data on creator payouts — the revenue generated by streamers — that were leaked following a massive data breach on October 6. They detected some 2,000 Turkey-based streamers who have very few followers but attract large amounts of donations in the form of Bits, a virtual currency Twitch viewers can purchase and use to support streamers through a process called “cheering.”

As part of the scam, the credit card thieves purchased Bits with stolen credit cards and donated large sums by cheering Turkey-based accomplices, then asked them to refund 70 to 80 percent of the proceeds as part of a money-laundering scheme.

Among Turkish Twitch users, the exposé led to a #CleanTwitch (#TemizTwitch in Turkish) hashtag campaign on Twitter aimed at shaming Twitch into going after illicit actors. Gursel Tekin, a Turkish lawmaker from the pro-secular Republican People’s Party, filed a parliamentary question with the Ministry of Treasury and Finance on October 31, asking whether Turkey’s Financial Crimes Investigation Board has launched an inquiry into the scheme. Tekin also inquired whether the Turkish government is cooperating with international law enforcement partners, since foreign currencies, including U.S. dollars, were used in the scheme.

A Twitch spokesperson told Middle East Eye reporter Muhdan Saglam that the company makes “efforts to combat and prevent financial fraud on Twitch on a regular basis,” and that it took action in September “against more than 150 partners in Turkey” for abusing its monetization tools. So far, however, Twitch has not announced any measures against the 2,400 Turkish streamers who colluded with Iran-based credit card thieves to launder money. One Turkish Twitch streamer complained that Twitch streamers were aware of the money laundering schemes on the platform but could not convince Twitch, Amazon, or other Twitch users to act.

As a Foundation for Defense of Democracies research memo showed in 2018, digital currency services and other technology platforms have become key targets for money launderers and terror financiers around the world. Technology companies need to step up their anti-money laundering measures as illicit financiers and terrorists increasingly exploit gaming and streaming platforms. The far-right German gunman who attacked a Halle synagogue on Yom Kippur last year, for example, livestreamed his murderous rampage on Twitch. Vice reported in 2019 that “nearly all” microtransactions among players of Counter-Strike: Global Offensive, a multiplayer game, were used for money laundering as part of a “massive worldwide fraud network.” This misconduct pushed the game’s developer, Valve, to introduce trading restrictions.

According to Sonuc, the Turkey-based money laundering scheme on Twitch has been going on for at least three years. Twitch’s compliance officers should have detected the massive multi-year money laundering effort, which within three weeks of the leak became obvious to Twitch streamers who were searching for evidence to undermine rival streamers.

This scandal underscores the need for technology companies to develop more effective due diligence and “know your customer” procedures, especially for clients based in Turkey and other jurisdictions on the grey list of the Financial Action Task Force, the global money-laundering watchdog.

Aykan Erdemir is a former member of the Turkish parliament and senior director of the Turkey Program at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Iran Program, Center on Economic and Financial Power (CEFP), and Center on Cyber and Technology Innovation (CCTI). For more analysis from Aykan, the Turkey and Iran programs, CEFP, and CCTI, please subscribe HERE. Follow Aykan on Twitter @aykan_erdemir. Follow FDD on Twitter @FDD, @FDD_Iran, @FDD_CEFP, and @FDD_CCTI. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.