New York AG's Office Flips Counter-Strike Knife Skin for State Purposes

The state's investigation into Valve's loot box practices leads to skin trading on the Steam Marketplace.

Published on Feb. 26, 2026

Got story updates? Submit your updates here. ›

The New York Attorney General's Office has revealed that it has been actively trading Counter-Strike knife skins on the Steam Marketplace as part of its investigation into Valve's loot box mechanics. The state claims this demonstrates that the virtual items have real-world value and can be used for money laundering, further bolstering its case against Valve.

Why it matters

New York's lawsuit against Valve alleges that the company's loot box systems violate gambling laws and pose risks to both children and adults. The state's skin trading activities show how these virtual items can be converted into cash, which could enable money laundering and other illicit activities.

The details

According to the court filing, a New York OAG investigator purchased a 'Stiletto Knife' Counter-Strike skin, sold it on the Steam Community Market for Steam Wallet funds, used those funds to buy a Steam Deck, and then resold the Steam Deck for $180 in cash. This process demonstrates how Valve's digital marketplace can be used to convert virtual items into real-world money, which the state argues is a key part of its gambling allegations against the company.

  • On February 26, 2026, the New York Attorney General's Office announced its lawsuit against Valve.

The players

Letitia James

The New York Attorney General who announced the lawsuit against Valve.

Valve

The video game company that operates the Steam platform, which is the focus of the New York Attorney General's lawsuit.

Got photos? Submit your photos here. ›

What’s next

The New York Attorney General's Office will continue its investigation into Valve's loot box practices and the potential for money laundering through the Steam Marketplace.

The takeaway

This case highlights the complex issues surrounding the monetization of virtual items in video games, and the potential for these systems to be exploited for illicit purposes. It also demonstrates the proactive approach the New York Attorney General's Office is taking to address these concerns.