Counter-Strike: Global Offensive's weapon skin economy is a vitally important part of the game for its health and continued popularity. Some of these are so rare they're worth upwards of a thousand dollars, so the community and Valve take messing with them very seriously. However, duping is still occuring and some are predicting a serious problem if it isn't fixed soon.
CS:GO is one of the best FPS games ever, but that doesn't stop it being beholden to its microtransactions.
The news comes out of the GlobalOffensiveTrade subreddit, where a post was made by Freakesport pointing to evidence of duping of the AWP | Dragon Lore skin, which you can see above and was worth around $1500, along with many others. All the items traded go through the same two accounts, then they are reported as stolen and Valve creates copies, as it's the only way they can restore lost items without harming legitimate customers. This was part of the reason for the new trading rules regarding phone authentication, but it seems something isn't working.
A post on the main CS:GO subreddit has brought this to the attention of the wider community and, hopefully, Valve. Poster Derpcrawler shows that some basic napkin math and assumptions would indicate that over $1,000,000 will have been injected into the economy by this method. They also explains why this is actively damaging, lowering the prices of rarer items meaning less money going into the game. It isn't a massive problem now - the price of a single gun skin dropping from $1500 to $1300 isn't the end of the world for a wider audience - but could be a serious issue in the long run if Valve allow it to continue.
I think the apocalyptic predictions are a little off-base, but they're right in saying that TF2's drop from relevance can be partially linked to this problem, and that Dota 2's market has crashed significantly. I believe the pro scene could sustain itself without high-value betting via skins, but it would be a loss of revenue from one angle that would need to be replaced, and could stunt growth. Major sponsors aren't concerned with this sort of thing, but a large number of smaller ones are.
Exactly how it's getting done is up for debate - as you'd expect there's a lot of speculation. We shan't add to that here, so suffice it to say that the conspiracy theorists are already out in force.