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Yes and yes. Valve has been known to remove games from Steam accounts in cases of abuse, e.g. credit-card fraud or stolen license keys.

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I've never heard of Valve removing single games from an account before. It's common knowledge though that if you ever do a charge back for a purchased game they shut down your account and it becomes irrecoverable.

It's a blanket policy and a reason why I never use Paypal for Steam, use a real or "throw-away" credit card for Steam purchases. Alternatively, you could not buy from Steam at all, I don't anymore but it's too late for me. I already have over 200 games with them and worry about losing access to everything.

The only case I know for certain that Valve removed a single game from accounts was the time a large number of Dirt 3 keys were leaked from a graphics card promotion. A friend traded a game for one of the stolen keys, not knowing about the leak. About a day later, the game disappeared from his library with no fanfare. He didn't even get an email from Valve.

I've also heard that Valve will remove games that were acquired through the trade system if the original buyer obtained them fraudulently.

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