From Valve Developer Community
When a player is connected to a VAC-secured server (denoted by a security badge and the letter V in the server browser), the VAC system checks if any foreign processes are hooked into the player's local game binaries. If the VAC check finds a positive ID for any possible cheating tool, the offending player's Steam account is then permanently banned from all VAC-secured servers after a variable amount of time.
Valve Anti-Cheat will not detect content hacks such as invisible wall textures or bright-colored player models. Server admins that wish to block such activity will need to run a pure server.
Valve Anti-Cheat is a shared element of the Source engine; thus, it is supported by any Source-based multiplayer game.
For server admins that wish to use VAC, you should run your server with the
-secure command line parameter. If you are using the Steam srcds frontend, make sure that the Secure (Valve Anti-Cheat) option is checked.