I'm reading the FFIEC's Social Media: Consumer Compliance Risk Management Guidance.

The BSA/AML section says, "Financial institutions should also be aware of emerging areas of BSA/AML risk in the virtual world. For example, illicit actors are increasingly using Internet games involving virtual economies, allowing gamers to cash out, as a way to launder money. Virtual world Internet games and digital currencies present a higher risk for money laundering and terrorist financing and should be monitored accordingly."

Can someone explain how the virtual world internet games and economies work and how this impacts AML?

There are a few articles around the internet about this. Try these:
here: http://www.bankinfosecurity.com/virtual-money-laundering-fraud-a-809/op-1
here: http://www.policeone.com/police-technolo...ney-laundering/
here: http://slummagazine.wordpress.com/2012/08/24/is-virtual-world-money-laundering-a-real-threat/
and here: http://finance.fortune.cnn.com/2012/12/18/bitcoin-money-laundering/

There's a thread on here somewhere too that would be relevant - look for the thread on bit coins.

I am not sure that the article can be viewed without a sign in, however ACAMS recently had an article explaining the topic. Here is the link: http://acamstoday.org/wordpress/2012/12/04/virtual-worlds-the-new-frontier/

You may find this interesting Virtual Currency Schemes

Wow! Thanks everyone!

Here's more on Bitcoins from the FBI

FBI Report on Bitcoins