The practice might not sound overly dubious at first glance, but in addition to messing with in-game economies and generating tons of spam, it has unfortunately given rise to a number of real world sweatshops, and is even being used as forced labour in some Chinese prisons.

The shocking news comes from an ex-inmate at Jixi labour camp in North Eastern China, who recently spoke to the Guardian about the use of gold farming in prisons.

The 54-year-old Liu Dali (whose name has been altered), was jailed for three years in 2004 for “illegally petitioning” the government about corruption in his hometown. During his time behind bars, the ex-prison guard had to take part in the backbreaking manual labour practised in prisons throughout China, involving mining, trench digging and carving toothpicks with his bare hands, among other things.

At night the prisoners rarely escaped the drudgery of forced labour, as prison guards forced inmates to play World of Warcraft online for hours at a time collecting virtual gold. “There were 300 prisoners forced to play games. We worked 12-hour shifts in the camp. I heard them say they could earn 5000-6000 rmb (R5500 – R6500) a day. We didn't see any of the money. The computers were never turned off.”

The prisoners were forced to go through the extremely monotonous task of gold farming for hours at a time, and while it may sound relaxing compared to the rest of their stay, Liu said punishment was just as real.

“If I couldn't complete my work quota, they would punish me physically. They would make me stand with my hands raised in the air and after I returned to my dormitory they would beat me with plastic pipes. We kept playing until we could barely see things,” he said.

The trading of virtual currencies is not new in China, in fact it's estimated that 80% of all gold farmers stem from China, the country with the world's largest internet population. And while legislation has been passed seeking to restrict the practice, requiring businesses to have licenses for the trading of fictional currencies, Liu says he believes the practice is still continuing.

“Many prisons across the north-east of China also forced inmates to play games. It must still be happening,” he said.

While gold farming has never really been put in a good light, the extent to which the practice is being abused is truly shocking. The billion dollar industry that has arisen around virtual goods (from Second Life to WoW to Facebook) is here to stay though, meaning tougher rules need to be implemented regarding virtual trading.