YouTube is a force of nature. If one requires information on how to build a cabin from mud and twigs, there is a video for that. If you want to watch someone clean up crime scenes, there is a whole YouTube channel for that. The first rule of the internet is that if you can think of it, someone has made a video for it, nearly without exception. We have seen the rise of terms like “Influencer” and “Content Creator,” and the prospect of making a living recording yourself doing any number of obscure tasks is now a perfectly viable course of action. According to Global Media Insight, 2.7 billion people use YouTube Worldwide every single month, and content creators currently operate about 114 million active channels.1 What this translates into, monetarily, is that content creators were paid $70 billion over the past 3 years.2 While this makes YouTube a media giant, and the second most popular search entity next to Google (YouTube is owned by Google LLC), it also results in an increased risk of money laundering to financial institutions that serve influencers, content creators, and related business entities.
One could drill down into the financial intricacies of YouTube for days and still not scratch the surface of the true financial impact of the service. In this discussion, we will focus on a particular subset of income that influencers can tap into and one that has one of the most significant risks for abuse and financial crime by content creators and their proxies– Superchats. Unless one has spent a significant time following individual content creators, particularly those who go live with their respective audience often, the true impact of these aspects of Influencer income can be overlooked. Essentially, when an Influencer chooses to livestream themselves interacting with fans of their channel, as opposed to the more typical video uploads, the individuals currently watching and interacting with the creator can pay money to have their comment pushed to the front of the line, and in many cases read on stream by the creator themselves (or by text-to-speech bots). These can be tiered based on the amount spent for the luxury and can add up quickly, as many of these livestream encounters have thousands of individuals interacting with the channel owner at once, and each of those individuals can spend $2,000 every week buying commenting rights.3 Top performers can make millions of dollars every year from these Superchats alone, even with YouTube itself keeping 30% of Superchat revenue generated by content creators.
The crux of what makes this revenue stream so ripe for abuse is how these Superchats are paid for. Superchats require the creator to have at least 1,000 subscribers, 4,000 hours of watch time on their channel (total hours watched by all users), and be in an eligible location (currently 95 countries are eligible, including high-risk jurisdictions). A full list can be found on the YouTube Help Center. These Superchats can be paid using a credit card, a debit card, and through Google Play (and Google Play gift cards), with the Google Play option having particularly large risks due to their increasingly popular role in phone scams due to their internationally transferrable balances and ease of purchase. In fact, gift card fraud in 2023 accounted for about $217 Million dollars of fraud earnings for scammers.4 It is also not difficult to meet the required thresholds for viewership, as many services offer subscriptions in bulk from ghost accounts, as well as services that will simulate individual users watching a particular content creator or Influencer’s channel to attain the hours watched requirement. Once the channel reaches the requirements, it can easily be buried in the millions of other YouTube Channels to collect funding via Superchats from virtually any source and from a nearly limitless number of individual contributors.
It is true that the 30% piece that YouTube takes for itself is a steep ask for those interested in laundering money, but the anonymity it provides, the legitimacy that collection from a major corporation like YouTube provides the end recipient, and the ability to translate possible stolen gift card funds directly into “Ad Revenue” are all strong reasons why a money launderer may choose to use straw man YouTube Channels, or employ legitimate content creators, to aid them in cleaning illicit funding via YouTube Livestreams, regardless of the amount surrendered to YouTube. Additionally, monitoring and reporting of this activity by financial institutions is not typically a priority, and because individual users can give whatever denomination they want (up to the $2,000.00 weekly cap), it is hard to qualify the legitimacy of livestream revenue using metrics such as view counts on prerecorded material or concurrent livestream viewers. A generous audience of 200 viewers can easily outperform 1,000 conservative ones.
So how can institutions protect themselves from aiding such activity? The influencer economy is complicated, multi-faceted, and most importantly, fluid. Creators come and go, channels can be remade and rebranded, and international actors could spread their activity across many, if not all, of the 95 countries where this service is permitted. Financial institutions can protect themselves from exposure by employing individuals and contractors with broad knowledge of the influencer economy and its minutia. This can present itself by monitoring transactions for large-dollar payouts from entities such as Adsense (advertising remuneration service for YouTube), identifying when a customer is receiving revenue from YouTube that their viewership and engagement is commensurate with the level of revenue generated, and bolstering existing Know Your Customer (KYC) programs to include occupations such as Content Creation, Influencers, VTubers, and Gamers, and metrics which are specific to them. Red flags specific to these risks can also be monitored, such as a creator receiving more revenue than their engagement would suggest, or a robust YouTube presence, but other internet presences are limited or non-existent. One scenario might be a customer receiving large volumes of such revenue, but a review of their channel shows a small number of comments on their videos when compared to views, which is indicative of purchased subscribers and viewership. This should be investigated to ensure the customer is not using the channel, and thus the financial institution account as a passthrough entity.
While the risks involved with content creation and banking creators and influencers will only continue to grow, institutions can and should be protecting themselves by understanding the ins and outs of the industry and the gaps in protection from vendor-side policies. YouTube is the largest, but the rise of YouTube and other services (primarily focused on Gaming) such as Twitch and Kick will mandate that financial institutions begin taking steps now to educate themselves against the threats of the Influencer Economy.
1. https://www.globalmediainsight.com/blog/youtube-users-statistics/#:~:text=In%20December%202023%2C%20YouTube%20saw,Billion%20visits%20from%20desktop%20users. Accessed 10/16/2024.
2. https://fortune.com/2024/02/06/youtube-ceo-neal-mohan-letter-creators-payout/ Accessed 10/16/2024
3. https://www.uscreen.tv/blog/youtube-super-chat/#:~:text=If%20you%20already%20know%20about,comments%20during%20a%20live%20stream. Accessed 10/16/2024.
4. https://rhodeislandcurrent.com/2024/04/16/as-consumers-lose-millions-to-gift-card-scams-lawmakers-pressure-businesses/ Accessed 10/16/2024
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