Firm & News

How Can Developers Beat Cheaters?

Cheating is as old as the first rule-based competition and probably dates back to some Old-Greek or prehistoric time.

Cheating in video games has an ambiguous tradition, ranging from developer-promoted cheat codes in game manuals to a multi-billion industry of third-party cheat software created through the demand of online players’ need for that win. It is likely impossible to prevent someone from cheating, but it seems that some studios are finding a way of preventing cheaters from accessing their cheat tools by suing the makers of cheat software.

In this article, we will delve into Bungie's recent lawsuits against cheat makers to help understand why cheat software makers are often liable for their behavior, and the risks and benefits from these lawsuits for players, game developers, and the cheat manufacturers themselves.

In April 2021, the Destiny developer successfully settled a case for $2 million against GatorCheats and settled a lawsuit against another cheat developer for $13.5 million in June 2022. Two recent cases brought by Bungie cement the studio’s status as a pioneer in the legal battle against cheat manufacturers:

Is There a Law Against Cheating or Cheat Software?

Cheating (in sports, video games, or other competition) is not illegal per se under federal and state law. There is no video game statutory law that says a cheater is a bad person and that because he cheated, he must go to jail. Hence, the studios get creative. The commonly made claims by the studios against the third-party cheat software makers typically include:

  • Copyright infringement: modification or reverse-engineering of the game’s assets as is necessary to develop the cheat software, but without a license.
  • Trademark infringement: unauthorized use of the branding or “marks” held by the game-maker, which cheat makers tend to need to market their cheats.
  • Breach of contract/tortious interference with a contract: behavior contrary to the terms in the developer’s licensing agreement. The cheat maker will have to download and buy the game to access the code and the software for their development of their cheat software.
  • State consumer protection laws: In the U.S., each state has its own laws meant to prevent businesses from using deceptive or unethical practices in selling their goods, like Washington’s state consumer protection laws in the Bungie cases.

Specifically, Aimjunkies argued that Bungie should be held liable for obtaining information about the cheat software from Aimjunkies’s computers and then surveilling the operations without consent, essentially saying Bungie had to download the cheat software and by “hacking” the cheat violated the cheat maker’s terms. Further, Bungie could show that Aimjunkies was attempting to evade detection by Bungie “such as [by] deleting any mention on their website of Destiny 2 and adding the word “Destiny” to their website’s profanity filter.” Aimjunkies thereby deliberately concealed operations and marketing of the cheat from the developer itself.

Some Takeaways for Players, Studios and Software Developers

Players that use third-party cheat software will likely not see studios threatening legal action against them because it is simply uneconomical to pursue one or all cheating players if you can go after the gatekeeper. Not only is the effort tedious, but also the sums that a studio can recover are tiny in comparison.

Regardless, studios likely have a contractual claim against players because their use of cheat software in most cases violates the EULA and the Terms of Service. Studios leverage their rights from the EULA and the Terms of Service and push cheating players to forfeit the price of the game and any in-game purchases without legal recourse. Studios further leverage these rights for community-based enforcement measures like public shaming or lengthy in-game bans to make it more difficult for players to recommit cheating offenses. To combat cheating, Battlestate Games (Escape From Tarkov) encouraged its playerbase to continue “reporting the bastards,” further stressing the importance of playing fair. Such calls for action seem to have led to mass bans. Sometimes studios choose a less impactful route and request from banned players a homework assignment to reclaim their accounts; one developer required cheaters to submit an apology essay on the damaging effects of cheating.

Lastly, players that use cheat software have to be specifically aware that they may find themselves caught up in legal action against the cheat maker. A court could determine that players' download and usage data of the cheat software proves valuable for the legal proceeding. This includes seizure of personal data of or evidence of payments made by the player to access the cheats. In California, a court approved Jagex’s request to obtain the personal information of users who used cheats in RuneScape. The cheat users’ information was acquired even when housed on a third-party website like YouTube.

Developers should take these victories as a success against the rising number of cheat makers, though this is not without costs. Game devs will need to continue spending thousands and perhaps millions of dollars on robust anti-cheat systems, depending on the size of the playerbase. Bungie itself alleges over $2 million spent to combat cheaters. But legal proceedings take time and money, and studios of popular multiplayer titles are forced to implement cheat detection software ASAP, either in-house or via third parties like BattlEye, to hold cheat makers accountable without or before filing a lawsuit.

Aside from technical measures, developers will have to set the grounds for legal battle with the terms they provide for in their EULA and Terms of Service. In particular because these terms provide the rules for download and use of the code, which the cheat software requires for development. Most EULAs therefore include a ban of reverse-engineering game software, and some specifically address using cheats in online settings. For example, Bungie’s LSLA prohibited players who “[h]ack or modify Destiny 2, or create, develop, modify, distribute, or use any unauthorized software programs to gain advantage in any online or multiplayer game modes.” Studios should consistently vet and update their EULAs to ensure that they prohibit any modification of game software without the developer’s permission.

Cheat software manufacturers run a precarious business model, given the costs incurred by litigation for infringement (and the ability of larger developers to foot the bill for these lawsuits). It will be difficult to convince a court that making and selling cheats does not infringe upon a studio’s intellectual property and commercial rights in some manner. Large payouts to studios are likely to persist for willful and large-scale infringement by cheat developers. Even for games where lawsuits were not previously explored (i.e., because the developer may not have had the financial means to sue or cheating was handled with non-legal alternatives), some devs may want to emulate the success of companies like Bungie. This will be especially true if courts continue to order the cheat makers to pay for the developers' costs to bring the lawsuit itself, which amounted to over $735,000 in the Aimjunkies case and $215,000 in the VeteranCheats case. As seen in the past, perhaps smaller devs will take the hint from companies like Bungie, Ubisoft, and Riot Games to join forces against cheat makers in a single bout of litigation against a common enemy.

Furthermore, if a cheat maker is caught, their corporate records may be required to be turned over to determine how much money the cheat software brought in. Destroying evidence or refusing to comply with the terms of discovery could lead to additional monetary costs. For example, in May 2023, the court ordered Aimjunkies to turn over its Bitcoin wallet, and earlier, subpoenaed PayPal to turn over customer records for those ordering the cheats. In a 2018 court case in Australia, Rockstar Games (Grand Theft Auto, Red Dead Redemption) was able to obtain a legal order to search the work and homes of cheat developers.

If there’s one takeaway from Bungie’s recent lawsuits, it’s that cheaters will cheat but that developers have tools to take them on; some more costly than others.

Author: Matthew Vernace

Released: November 8, 2023

Firm & News

Who really owns the company?

If a French authority wants to know who really stands behind a company registered in the United States, can it find out? The answer sits where three layers of law meet: federal, state, international and they do not always line up.

The federal layer : FinCEN

The United States created a tool designed for precisely this purpose. The Corporate Transparency Act passed in 2021 as part of the Anti-Money Laundering Act of 2020 it created a register of beneficial owners held by FinCEN, the Financial Crimes Enforcement Network, to make it harder to hide behind anonymous companies; at launch it was expected to capture tens of millions of entities.1 Then it ran into trouble.

Small businesses challenged it across the country as exceeding Congress’s powers and as an unreasonable search, winning a string of injunctions before the appellate courts ultimately upheld the statute.2 In the meantime, to spare millions of low-risk domestic businesses the compliance burden and to refocus on higher-risk foreign entities, the Treasury narrowed the rule in March 2025: companies formed in the United States are now exempt, and only entities formed abroad and registered to do business in the country still report.3

This was a deliberate choice, not a legal requirement. Treasury Secretary Scott Bessent presented it as part of an effort to ease the regulatory burden on American small businesses4. What followed made this even clearer. In December 2025, a federal appeals court “the Eleventh Circuit” ruled that the CTA was constitutional after all, overturning the lower court that had struck it down5. Even so, the narrower rule stayed in force. The result is a register that was built to reveal who owns American companies, but that now covers almost none of them not because reporting became optional, but because the government deliberately narrowed who has to report. A system once expected to cover tens of millions of companies now applies to only about 12,000 foreign ones.

The New York layer

New York had moved in the same direction, for reasons close to home. Anonymous LLCs had long been used to buy New York real estate with money whose origin was hidden, and to shield landlords who mistreat tenants, contractors who commit wage theft and owners who evade tax so the State passed its own LLC Transparency Act to unmask the real people behind such companies and give regulators and law enforcement a way to hold them accountable.6 The law took effect on 1 January 2026, with its own database of owners. But New York had tied its definitions to the federal statute so when Washington narrowed the federal rule, New York’s narrowed with it, and the Governor vetoed the corrective bill in December 2025 to avoid burdening New York businesses beyond the federal baseline.7 The result is striking: the New York law now reaches only non-US LLCs registered in the State. A French company holding a New York LLC may be among the few entities that must actually file, by 31 December 2026, while American LLCs need not.

The international layer : treaties

This is where the real question emerges. Under the US Constitution, only the federal government concludes treaties; a State cannot.8 France therefore cannot simply ask New York for the information its requests travel through federal channels: the France–US tax treaty, the FATCA agreement, mutual legal assistance.9 New York’s confidential, state-run register is not wired into those treaty routes. With the federal register emptied of domestic companies and the State register limited to foreign LLCs, a foreign government searching for the person behind a purely American company faces a genuinely open question. Two legal systems chase the same goal : knowing who owns what, and where the money sits and arrive in very different places.

For a firm whose clients live on both sides of that line, the gap is exactly where counsel earns its place: identifying what foreign clients must file in New York, monitoring federal rules that are still in motion, and keeping a company’s ownership picture clean before anyone has to ask for it.

The same logic governments trading information drives an obligation that touches almost every cross-border client: declaring bank accounts held abroad. France and the United States both demand it, both feed the same machinery of automatic exchange, and both enforce it. What differs is the cost of getting it wrong.

DECLARING ACCOUNTS HELD ABROAD

FRANCE

UNITED STATES

Form 3916

Filed with the annual income-tax return; one form per foreign account.

Civil (tax) penalty for non-declaration: €1,500 per account, each year up to €10,000 for a non-cooperative state.10

The FBAR : FinCEN Form 114

Required for foreign accounts over $10,000 in aggregate; filed with FinCEN.

US civil penalties for non-compliance: up to $16,536 per report (non-willful); for a willful failure, the greater of $165,353 or half the account balance. Criminal penalties may also apply.11

Same architecture but very different stakes.

What held me was not the technical detail but the shape of the thing: a single objective, pursued from two legal traditions, landing far apart. Sitting between them turning one system into the language of the other is the daily work of a cross-border practice.

By Sarah Mansouri · Legal Intern, KBL Roche · New York, June 2026

This article reflects the personal perspective of the author and offers general information on developments in cross-border law as of June 2026. It is not legal advice.

notes and references:

1 Corporate Transparency Act, 31 U.S.C. § 5336 (2021). FinCEN estimated about 32.6 million entities would have to report (fincen.gov). 2 Court challenges to the CTA, e.g. Nat’l Small Bus. United v. Yellen (N.D. Ala. 2024) and Texas Top Cop Shop (E.D. Tex. 2024). The federal appeals court (11th Cir.) upheld the Act on 16 Dec. 2025.
3 FinCEN interim final rule limiting reporting to foreign companies, « Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension », 90 Fed. Reg. 13688 (26 mars 2025)
4 Treasury Department press release, "Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies" (2 mars 2025)
5 The Eleventh Circuit decision — Nat'l Small Bus. United v. U.S. Dep't of the Treasury, No. 24-10736 (11th Cir. Dec. 16, 2025)
6 N.Y. bill S.995-B, sponsor’s justification (nysenate.gov); Gov. Hochul, statement on signing the LLC Transparency Act (22 Dec. 2023).
7 N.Y. Limited Liability Company Law § 1106. The corrective bill S.8432 was vetoed on 19 Dec. 2025.
8 U.S. Constitution, art. II, § 2 (treaty power is federal) and art. I, § 10 (States may not make treaties).
9 France–U.S. tax treaty of 1994 (information-exchange article) and France–U.S. FATCA agreement of 2013.
10 Code général des impôts, art. 1649 A (duty to declare) and art. 1736, IV (the €1,500 / €10,000 penalty).
11 31 U.S.C. § 5314 (FBAR obligation), § 5321 (civil penalties: up to $16,536, or for willful failures the greater of $165,353 or 50% of the balance) and § 5322 (criminal penalties).

From Your Site Articles
Related Articles Around the Web
tax corporate international law tax compliance
Team

Yusuke Hisashi, Esq. (LL.M.)

Subscribe to our newsletter

Latest Articles

U.S. Tax Tips

Q1 2021 Tax Deadlines

2021 Estimated Tax – 2020 Tax Returns

Excellent, professional service and advice. Highly recommended!

– Amy Reynolds, Ireland