If you are a frequent player on the popular space MMO, EVE Online, you’ve probably heard about Phaser Inc. and how it scammed thousands of players out of over a trillion ISK (EVE Online currency). How did it do this, and why did so many people fall for it? The answer is very simple: the people behind Phaser Inc. created what appeared to be a legitimate investment that a few people bought into. After that, it only required a handful of emails and time for the word-of-mouth advertising to take hold.
The premise of the scam was simple. If you invested money in Phaser Inc., the in-game corporation would guarantee a return on the investment of 5%, every week. After 20 weeks, you would essentially double your investment. So many people invested in Phaser Inc. (over four thousand), that its available funds grew to exceed a trillion units of EVE Online currency in no time. At any point, investors were able to withdraw their investments and walk away with their acquired profit in-hand, but few saw the warning signs that Phaser Inc. was about to pull the plug and walk away with everyone’s money before it was too late.
On August 12, 2011, Phaser Inc. updated its official Web site with a long-winded explanation of exactly how its scam went down. After 4,252 individuals and corporations signed up and invested into its virtual service, 1,831,672,334,372.65 total ISK was invested, and eight months of total uptime, the people behind Phaser Inc. (Mordor and Eddie) walked away. To put it one way, they made more EVE Online money in eight months than a single player could make grinding away at minerals and killing monsters could ever make. Translating virtual money to the US dollar, they walked away with roughly US $64,000.
This isn’t the first major scam to cheat players out of their hard-earned virtual currency. EVE Online has long been known as something of a virtual wild west, where players are free to scam and attack one another. There is no truly safe harbor for players, and the answer from the game’s founding company, CCP, has always been that this is exactly how the game was designed. Corporations have been infiltrated and turned upside down by spies from enemy organizations time and time again, and one rule seems to stand above all others: EVE is real.