Problems at Roblox (RBLX)
Problems at Roblox (RBLX)
Roblox (NYSE: RBLX — $38.3 billion) is a platform for children generally between six and fourteen to play online. It is also the leading platform for pedophiles. Roblox ex-employees, Roblox developers, Roblox award winners, and Roblox users have been linked to a wide array of misconduct. Roblox’s former social media manager ran a pornographic blog while employed by the company. Roblox’s official Twitter account retweeted content made by a self-described pedophile. Multiple major Roblox developers have been banned after being exposed for pedophilia. Moreover, Roblox allegedly shut down its own community forum after it became inundated with links to illegal child porn sites and Roblox’s current head of content moderation previously followed a “furry porn” account. The company has engaged in litigation and intimidation to help conceal allegations of pedophilia on the platform. There are real-world consequences.
For example, 29-year-old convicted pedophile Owain Thomas “groomed 150 children to engage in sexual activity using Roblox.” 60 of those children were under the age of 13 and in many cases Owain Thomas used Roblox’s in-game currency, Robux, to solicit children. In one case Owain Thomas “paid a 10-year-old victim 400 Robux to perform a sexual act while he watched him on a webcam.” A lawyer called the volume of abuse “possibly unprecedented.”
In September 2020, 48-year-old registered sex offender Clinton McElroy was arrested after convincing an eight-year-old girl “into sending sexually explicit videos in exchange for Robux.” McElroy “was previously convicted in 2018 of commercial sexual exploitation of a 14-year-old child.”
In June 2021, 18-year-old Ron Machluf was indicted for using Roblox “to lure and commit sexual offenses against several girls between the ages of 7 and 12.” According to the charges, Machluf would contact girls on the game's chat and offer Robux in exchange for partially nude photos.
In July 2021, 23-year-old Terrence Barto was arrested for “indecent solicitation of a child, violation of sex offender registry and grooming” after “he contacted a 12-year-old boy in Texas via Roblox.” At the time Barto joined Roblox he was already a convicted sex offender in Washington state. In response, Roblox said, “We continually develop cutting-edge technologies to ensure the Roblox platform remains a safe and fun space for players all over the world."
In August 2021, 61-year-old John Mathew Piecuch was indicted after posing as a 13-year-old boy on Roblox. He “contacted a 12-year-old girl and requested sexually explicit photos of her and her 5-year-old sibling.” Following the arrest, the Carroll County Sherriff’s Office put out an alert to warn parents that Roblox “is widely used by elementary-aged children.”
On January 24, 2022, Roblox’s founder and CEO, David Baszucki, published a “year in review” and outlined Roblox’s future priorities. The letter had a section devoted to “Expanding Digital Opportunities for Brands” but mentioned “safety” only once.
Two days later, Sarasota County police released a redacted probable cause affidavit against 45-year-old Patrick Penczak “on seven felony charges involving crimes against children” including “lewd and lascivious battery on a child.” Penczak allegedly “impersonated a teenage girl” on Roblox to meet his victims and “sent electronic [Roblox] gift cards in exchange for nude photos.”
Roblox claims to have “a large, expertly trained team with thousands of members dedicated to protecting our users and monitoring 24/7 for inappropriate content.” That may not be enough.
For example, a mom uploaded a video showing a Roblox world with inappropriate background music including the lyrics: "Let's go camping, let me touch you!" "16-minutes of touchy tension." "Haha, I tied you up." "You can cry, I just hit harder. You're wrong, now speed up faster." "I rape just for my pleasure.”
The parent added in her video description: “This is appalling and heinous. SHUT ROBLOX DOWN!”
In June 2021, an anonymous Twitch streamer uploaded a clip titled “Roblox pedophile meetup!” One user wrote, “I don’t like double digits.”
Some of the content on Roblox is far more disturbing.
An August 2020 investigation by Fast Company easily located inappropriate Roblox rooms like the one shown below. Clicking one of the signs can invite other plays to engage in inappropriate actions.
Parenting website Family Zone published a similar warning about “Orgy rooms on Roblox luring curious kids.” One sign reads, “Give your partner a suck.” A user claiming to be 10 years old says, “It’s a chill room.”
In October 2021, Roblox updated its terms of service to ban animations of “handholding or other romantic gestures.” That has not done much.
For example, a December 2021 video “I became a stripper on Roblox” shows numerous children playing in an inappropriate environment.
Two weeks ago, another video was uploaded titled “ROBLOX STRIP CLUBS HAVE VOICE CHAT NOW!?” The video has over 10,000 views and a top commenter wrote, “These games are about to be crazy.”
In a game that claims to ban “handholding or other romantic gestures,” children can now role-play as strippers with real audio and currency. How?
One reason may be Roblox’s perplexing head of safety and moderation, Bob Pieron. According to his LinkedIn, Mr. Pieron manages “a team of over 800 agents around the world” in Roblox’s Trust & Safety department. In 2018, YouTuber Ruben Sim published a video about Mr. Pieron’s social media activity and showed that he followed a “furry porn” account that made fantasy cartoons and sexualized cartoon animals. Mr. Pieron later changed his Twitter handle. A Bear Cave review of Mr. Pieron’s new Twitter account uncovers further peculiarities. For example, Mr. Pieron’s account liked numerous tweets of moderately sexualized cosplayers and animals, tweeted about a “5 color pony Princess Twilight Sparkle Deck,” and tweeted a GIF of a young girl dancing in a short dress.
In November 2021, Roblox sued Ruben Sim, 24-years-old, for $1.6 million and claimed his followers were a “cybermob” breaking Roblox’s terms of service. In a January 2022 response video that has gotten nearly two million views, Ruben Sim highlighted more inappropriate content by Roblox associates including that Roblox’s former social media manager ran a public pornographic blog with “furry porn” and photos of himself. Roblox settled its lawsuit two days after the response video was published.
Roblox’s current social media activity is equally troubling. On September 25, 2020, Roblox’s official verified Twitter account retweeted content from “DukeButDuke” with #FanArtFriday.
One commenter quickly replied:
One day later “DukeButDuke” tweeted, “Even if you absolutely expose me, I literally don’t give a care about it… if it means anything, yes, I am a lolicon.” The word lolicon derives from “Lolita Complex” and is a type of “anime that depicts underage girls” that is often illegal.
Twitter suspended DukeButDuke’s account. Roblox’s tweet remains up.
Roblox’s problem with pedophilia runs deep in its developer community as well.
For example, Roblox shut down its own community forum in 2017 after it was overrun with content from pedophiles including “an infamous post made by user ‘jaredpogi123kaba’… which linked to an illegal child sexual abuse site” according to a Roblox history site.
Another example is “MisterObvious” a major Roblox developer who won a “Bloxy award” from Roblox for being one of the best developers in the Roblox community. The YouTuber Ruben Sim later published videos, audio, and text screenshots showing “MisterObvious” sending and soliciting inappropriate content from underage girls. In addition, in April 2017 he filed a police report and in June 2017 uploaded a video on YouTube with over a million views covering the allegations. Roblox ultimately terminated MisterObvious’s account… in May 2021.
The problems continue to this day.
In August 2021, People Make Games published a critical investigation into how Roblox was exploiting its developer community. The channel says Roblox later called to pressure them to take their video down. Instead, People Make Games published a new December 2021 investigation with disturbing findings including messages between a 24-year-old Roblox game developer and a 12-year-old girl. Screenshots show that the developer, who used a variety of pseudonyms, allegedly offered to drive to her home and suggested she could “just jump out the window and I’ll take you somewhere nice.” Despite complaints to Roblox, this developer’s high-earning Sonic the Hedgehog themed Roblox games were not suspended until December 2021 when SEGA (the company that owns the Sonic trademark) filed a copyright infringement complaint.
Roblox users publishing YouTube video investigations to expose Roblox developer pedophiles is disturbingly common.
For example, on January 12, 2022, an anonymous teenager published an investigation into Roblox developer Andrew Whicker, who allegedly sent and solicited inappropriate content from a 14-year-old. The video investigation got over 100,000 views. One week later, the anonymous Youtuber published screenshots showing that another Roblox developer “LambdaCrux” solicited and sent inappropriate photos from underage Roblox users. Following the video “LambdaCrux” deleted his Roblox account.
On Roblox, children are publishing their own investigations to create publicity to help expose Roblox pedophiles to get Roblox to take action.
Children should not be responsible for hunting down child abusers in their own game. In Roblox they are.
The Bear Cave has also uncovered evidence that Roblox’s “Robux” currency is used for hundreds of millions or billions of dollars in illegal gambling and potential money laundering.
Roblox’s currency “Robux” allows kids to buy special clothing for their avatars and enhance certain in-game experiences. Robux can be bought for roughly one cent ($0.01 USD) and developers can redeem Robux directly with Roblox for roughly one-third of one cent ($0.0035). Other non-official sites pay higher rates.
Items bought with Robux can be resold in Roblox’s marketplace and some trade for thousands of dollars. Critics have argued that Roblox’s item marketplace is often a proxy for gambling with kids sharing tutorials on how to earn Robux trading items. Roblox even offers a Robinhood-like portfolio view:
In many cases, Robux are used for literal gambling.
Take for example RBX Flip, which calls itself “the original Roblox Casino.” It offers games like coin flip, rock paper scissors, and “jackpot” and allows users to bet proxy items in place of Robux. One common item used on RBX Flip is titled “Perfectly Legitimate Business Hat” which trades for around 11,000 Robux (~100 USD) and has a “very high” turnover.
In a December 2020 interview, RBX Flip’s founder published screenshots showing that over 7 billion Robux (~$70 million USD) had been wagered on the platform. In a December 2021 follow-up interview the founder said, “In 2021 alone RBX Flip has made about 10 times the revenue it did the previous year” or roughly $700 million USD in wagers. RBX Flip’s website also claims over 50 billion Robux has been won on the platform (~$500 million USD).
A newer competing site, RBX Crash, allows games like “Coinflip,” “Dice,” and “Roulette” where the maximum bet is one million Robux (~$10,000 USD).
RBX Crash’s terms of service tell users: “We reserve the right to terminate or suspend access to the Service immediately, without any prior notice or liability, at our sole discretion… all of our game modes are 100% provably fair” and that winners are decided by “a cryptographically secure pseudorandom number.”
On page 83 of its IPO prospectus, Roblox tells investors that it created its virtual currency “with applicable laws and regulations in mind.” Roblox discloses:
“Although we have structured Robux… with applicable laws and regulations in mind, including applicable laws relating to money laundering and money transmission services, and believe we are in compliance with all applicable laws, it is possible that a relevant regulator may disagree, which could expose us to penalties.”
In addition to gambling, many websites and apps offer kids free Robux to complete surveys, download apps, write fake reviews, watch ads, and do other menial tasks. For example, “Free Robux Loto” offers children potential free Robux by spinning a slot machine between advertisements. One child left a one-star review after having difficulty cashing out and wrote, “I got this game because my family could not afford Robux.”
One source interviewed by People Make Games suggested that the Roblox black market has simply become too big to fail and said: “Roblox can’t crack down on it because they would just get backlash. So they turn a blind eye to it.”
Parents, investors, and regulators seem to have turned a blind eye as well. If that changes it could pose a serious risk to Roblox, because, as the company discloses in its risk factors:
“The success of our business model is contingent upon our ability to provide a safe online environment for children to experience and if we are not able to continue to provide a safe environment, our business will suffer dramatically.”
Caveat emptor.
Further Resources
“Roblox Pressured Us to Delete Our Video. So We Dug Deeper.” (People Make Games)
“Roblox Is Suing Me For $1.6 Million” (Ruben Sim)
This article is not investment advice and represents the opinions of its author, Edwin Dorsey. You can reach the author by email at edwin@585research.com or on Twitter @StockJabber. This article is for paid subscribers of The Bear Cave newsletter. If this article was forwarded to you please consider becoming a paid subscriber to receive articles like this twice every month. Learn more here.