US$900m 'virtual gold' economy faces regulation.

South Korean legislators are to ban commercial trading in the virtual currencies used by online gamers by the end of this year, local media reports say.

Almost US$900m worth of virtual cash is being traded every year by gamers in the country, according to official estimates.

Players of massively multiplayer online role playing games commonly use real world cash to purchase 'virtual gold' and other in-game currencies.

The players buy virtual cash to gain an advantage over other players, or to avoid boring and repetitive parts of the game.

With some games requiring tens of hours of play per week to develop a character, busy professionals commonly buy cash and in-game items to keep up with their peers.

Specialised virtual brokerages, such as ItemMania and ItemBay, have been established in Korea to let players buy virtual currency and in-game items, or even exchange one game's currency into another's. 

Players generally buy virtual cash with a credit card on the broker's website and then pick up the virtual currency and items from the broker's agent inside the game.

The new rules will impose fines on companies that broker virtual currency transactions, but do not appear to target exchanges between individual players.

However, it appears possible that virtual currency brokers may be able to move their operations outside the country to avoid legal action.

In addition, the new regulations as currently formulated do not appear to outlaw the sale of in-game items, according to Korean gaming blog Gamestudy.org. 

These items can sometimes be exchanged for cash or other items within a game, so would appear to offer a means for currency trading by proxy.

Additional rules to regulate this apparent loophole are scheduled for consideration in the second quarter of next year, according to reports.

The ability to exchange virtual cash for real dollars has been blamed for a wide variety of social ills.

Korea's online gamers were the victims of a massive wave of identity theft earlier this year, apparently instigated by gangs which used bogus free trial accounts to generate virtual currency to sell. 

However, some believe that the new regulations have been proposed at this time because online gaming has become unfairly associated with Korea's scandal-plagued video gambling arcades.

The country has been rocked by bribery scandals surrounding the semi-legal US$21bn video arcade gambling industry. 

Some 6.6 percent of Koreans were described as 'gambling addicts' in a recent survey, many of whom regularly play video poker and similar games in such arcades.

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