Money laundering, for one. You release some dumb asset flip and then "buy" it with your dirty crypto and Valve turns it into nice clean fiat money.
And yes, that is on Valve to prevent.
Fraudlent is accoriding to the law. If I steal your bitcoin I spend them on Steam it is fraudlent. I know cryptobros think stealing bitcoins are OK and shouldnt count as fraud but law isnt written by cryptobros.
how were they able to conclude the coins were stolen?
It’s not this. Steam accepted 0confirmations to ease the payment flow. Before the transaction would be mined into a block, the fraudster would submit a new higher priority transaction sending the payment to themselves.