The UK's Fraud Advisory Panel is calling upon the government to extend financial regulation into the virtual world of Second Life as fears grow over money laundering, fraud and terrorism according to the Telegraph. Second Life, and other virtual worlds could be used to transfer large sums of money wth pretty good anonymity:
The FAP, a watchdog established by the Institute of Chartered Accountants in England and Wales, says that criminal or terrorist gangs could use the game to move funds and avoid surveillance. Other risks, it says, include credit card fraud, identity theft, money laundering and tax evasion.
It's a wonder it's taken them this long to figure this stuff out. Virtual currencies traded against the USD are of course obvious targets for crooks, though I'm certain really large transactions are flagged by Linden Lab, creators of Second Life, and forwarded on ot the authorities.