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yeah but then all the authorities would have to do is go ask the people at Eve online what Bitcoin address was used to pay

No, you pay another player Bitcoin for ISK, and then sell the ISK to another player for USD

Still traceable.

Authorities follow Bitcoin transactions and ask questions which points them right to you.

And if you do it all at an internet cafe in Bangkok from behind 7 proxies and a fake beard?

No, you give the other player the entire wallet, you don't actually do a transaction

Then the investigators go to that person, and they point them towards you.

Eve knows the source of the ISK.

This is what these investigators do all day... track money as people try to move it around. They are good at their jobs