New Policy Regarding In-World “Banks”

Please read this if you operate, or have transferred L$ to, an in-world “bank” or financial company.

As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. We’re implementing this policy after reviewing Resident complaints, banking activities, and the law, and we’re doing it to protect our Residents and the integrity of our economy.

Since the collapse of Ginko Financial in August 2007, Linden Lab has received complaints about several in-world “banks” defaulting on their promises. These banks often promise unusually high rates of L$ return, reaching 20, 40, or even 60 percent annualized.

Usually, we don’t step in the middle of Resident-to-Resident conduct – letting Residents decide how to act, live, or play in Second Life.

But these “banks” have brought unique and substantial risks to Second Life, and we feel it’s our duty to step in. Offering unsustainably high interest rates, they are in most cases doomed to collapse – leaving upset “depositors” with nothing to show for their investments. As these activities grow, they become more likely to lead to destabilization of the virtual economy. At least as important, the legal and regulatory framework of these non-chartered, unregistered banks is unclear, i.e., what their duties are when they offer “interest” or “investments.”

There is no workable alternative. The so-called banks are not operated, overseen or insured by Linden Lab, nor can we predict which will fail or when. And Linden Lab isn’t, and can’t start acting as, a banking regulator.

Some may argue that Residents who deposit L$ with these “banks” must know they’re assuming a big risk – the high interest rates promised aren’t guaranteed, and the banks aren’t overseen by Linden Lab or anyone else. That may be true. But for all of the other reasons we’ve set out above, we can’t let this activity continue.

Thus, as we did in the past with gambling, as of January 22, 2008 we will begin removing any virtual ATMs or other objects that facilitate the operation or facilitation of in-world “banking,” i.e., the offering of interest or a rate of return on L$ invested or deposited. We ask that between now and then, those who operate these “banks” settle up on any promises they have made to other Residents and, of course, honor valid withdrawals. After that date, we may sanction those who continue to offer these services with suspension, termination of accounts, and loss of land.

We will not apply this policy to companies who submit a registration statement, charter, or other applicable license from a governing regulatory authority, or who are merely conducting marketing or education, but not accepting payments.

You may report a violation of this policy through the Help/Report Abuse feature in your Second Life viewer, and follow the instructions given.

Answers to FAQs are located here: http://secondlife.com/community/support.php?questionID=4899

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152 Responses to New Policy Regarding In-World “Banks”

  1. 1st response? how will this affect apez? they have atm machines to enable you to withdraw payments for items you sell on apez vendors

  2. Harper says:

    On first blush, a logical and expected move. More thoughts later on my own pages, after I’ve given it some more consideration.

  3. MrLunk Voom says:

    Where is the you can be in SL what you cant in RL ?
    Whats next on the banlist ?
    worrysome…

    grtz,
    MrLunk Voom
    http://www.cannacabanna.nl
    http://slurl.com/secondlife/Cryophile/98/214/27

    P.S. I dont own a bank but fear all this censorship !

  4. Ann Otoole says:

    so the existing so-called “bankers” and “stock exchanges” can just take the cash they have collected and run eh?

    glad i never fell for this scam. but a lot of residents are going to be hurt so maybe LL should seize the assets of these “banker” accounts right now and then figure out what to do with the assets. the amounts of rl money involved is pretty high and it will be sad to see these people get away scott free with nearly a million USD.

  5. Kristian says:

    Bravo! Now if only you’d done this 3 years ago!

  6. Lukas Mensing says:

    Thank you for doing this.
    First step to a real virtual economy 🙂

    When will camping be forbidden?

  7. I’m happy you’ve finally stepped in to do something about this.

    I only wish you would handle these things before they become legal liability for you.

    Numerous residents deal with actual theft of intellectual property daily, be it through someone reselling freebie-donated content without permission, stolen items through permission exploits, server rollback failures, and other loopholes, and time and again LL has refused to do anything– even simply frowning on the behavior publicly– instead expecting people to pay substantial legal fees out of their own pocket to obtain damages against the perpetrators. Damages that often don’t even cover those legal costs.

    So while I appreciate that you’re finally getting with it on many levels you’re still ways off from actually protecting your residents.

  8. Vx Shaw says:

    While this may be a painful process initially, I think this is the right step in the long run. I personally lost the equivalent of a few hundred US dollars from the Ginko failure, and while I expected part of that investment to be rather speculative, I didn’t expect complete failure. The mismanagement of the Ginko system was criminal in my opinion, and we need to squelch this activity.

    I urge SL based savings institutions to comply with policy and make your companies legitimate with real world accountability.

  9. Jay says:

    Thank Gawd!!

    Thank you for banning these so called ‘banks’ and making it clearer.

    p.s if you only done it sooner but better late than never 😉

  10. Tracy Rubble says:

    Worrying

    When I joined I though sl was the place to do what you want without rl boundarys.

    First gambling, then this, next we’ll have laws and courts in world

  11. Keiko Rau says:

    So basically what you’re saying is that the ponzi schemes which may have collapsed in the future at various times, are now all going to collapse in the next week, as everyone makes a run on the ATMs.

    Thats going to have a wonderful effect on the economy.

    While I can agree with LL creating these policies to align itself with various laws, the slippery slope that started in July with the gambling policy just got even more slippery. When is LL finally going to remove the “Your world Your imagination” from the web site? SL has become a world of regulation, not imagination.

    The more regulation enforced upon residents, the more SL becomes like the real world. It is not “My Imagination” if I am not permitted to create anything that I can imagine, and that motto has outlived its use-by date.

  12. HoneyBear Lilliehook says:

    @1

    Apex, SLX and On-Rez do not offer interest on monies paid to them. They are simply mechanisms to purchase goods.

  13. Martin Squeegee says:

    Hey – couple of things… didn’t think you liked calling lindens currency and surely banks in SL should only have to registers government agency as soon as soon as LL have registered Lindens in the same way? This suggests that you think Lindens are real?

    There are other businesses here that make money – does that all mean we will have to register them… and if we do are you going to be happy with all those registered businesses that operate outside the US – let’s not forget the gambling and VAT fiascos?

  14. Tim Harlow says:

    Why don’t they just make it so you can’t sell $L for real currency? This would solve a lot of problems… don’t get me wrong, I make my tier from $L… but if it would allow us to truely operate in a world “Imagined and created” (no longer owned) by residents, I would be for the change.

  15. bettinatizzy says:

    Congratulations, LL! You advised your community with enough time for us not to feel like we’ve been blindsided by you. This is the kind of communications and outreach I have been hoping to see from you.

  16. Vx Shaw says:

    @11 – If this new policy is something that inhibits “Your Imagination,” remind me to never have any business dealings with you…ok?

  17. Luxette Maximus says:

    I’m really worried for this. I use apez for selling my items, they’re gonna be removed as well?

  18. Ann Otoole says:

    I guess we now know why that one big “stock exchange” guy closed his ATMs down “for a month to make enhancements”. Perhaps LL needs to review it’s internal security practices so criminals are not “tipped off” well in advance giving them plenty of time to make excuses and then vanish with the hundreds of thousands of US dollars before the public figures out what happened.

  19. Stolen Razor says:

    Hmmm i think perhaps a list of money exchanges that are accepted is in order.Who is to say what instutions are ligible.Seems that we shouldnt have to take their word for it.So will thhere be a page setup from linden labs that list all cliental that has gone thru all the legalities so people will know who is to use.I use slexchange to do most of my transfers is it gonna be gone or they stuff right?

  20. Kalel Venkman says:

    I applaud this move – there simply was no viable means of dealing with the problem of unregulated banking in Second Life other than taking this step. Linden Lab is in no position to function as a Securities Exchange Commission, either from a functional standpoint or a legal one.

  21. Henri DuCasse says:

    Might it be possible to contact some in-world regulator, and suggest that they extend their policies to virtual economies like SL…?

    I’m not exactly up-to-speed on such things, but I would guess there’s some sort of regulatory body that takes care of internet transactions (such as international credit-card purchases, or PayPal transactions) – if they can be persuaded that the Linden Dollar economy is more than a pipe-dream, they may step in with enforceable regulations which cover a proper banking system in Second Life, which would make it possible for banks with honourable intentions to run in SL as in RL, and for less reputable ones to be dealt with by legal means.

    I’ve never invested money in any SL banks, but I was seriously considering it until this news came up. It sounded like a good idea (although obviously, it seemed risky, for all the reasons listed in the post above) and I think that, with enforceable legal regulations inplace, it still does.

    Just a thought…

  22. Brock Sewell says:

    It scares me that this policy seems to have been implemented with no thought of the flip side. Those institiutions that will look to get a banking charter will probably need more than 30 days.

    What’s going to happen with the inevitable run on the “banks” that is about to occur? LL could have just initiated a panic sequence to crash what little economic activity is left. A lot of people are going to be out of luck (and linden) on this one 😦

  23. Kalel Venkman says:

    Regarding SLX, they do not claim to offer interest and sell no financial vehicles, so I wouldn’t expect either SLX or OnRez to be considered to be banking establishments (though I’ve been wrong before).

  24. Rebecca Proudhon says:

    This is a good thing.

    Next the Linden exchange needs to go. So LL won;t eventually be targetted by the SEC and everyone else.

    There is absolutely NO reason business transactions in SL can;t go straight to real world money. The Linden needs to stay inworld only—no exchange.

  25. addax says:

    well seeing as once again I can’t TP anywhere I wont be able to get to bank !!!

  26. Pingback: The Second Life Grid Grind » Blog Archive » Linden Lab finally lays down law on banking

  27. Marlena Petrov says:

    Naturally nothing about the WSE caused collapse of Midas. Are you going to shut down the “stock” exchanges too?? and yes freeze the assets, as far as the owners go..let the depositors remove their money.

  28. Alicia Sautereau says:

    WooooHooooo!!!

    Makes up abit for the grid falling apart 😛

  29. Raudf Fox says:

    I’m glad to see this, to be very honest. There has been no accountability for those that open these ‘banks’ and then skip out without paying back their investors money.

  30. Finally…. some reasonable senses came around since Ginko non-sense.

  31. Raymond Figtree says:

    Does this apply to the WSE?

  32. Bato Brendel says:

    Geordie #1 you need to read it again. Specifical Paragraph #2 line #1.
    As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. IE banks….. Far as I know APEZ does not offer you any gains/interest/investment etc from them you get money for what you sell… not from some ‘magical’ interest/investment. This is why they are pulling ‘these specific’ types of ATM’s Apez has been around pretty long and if they were boning people on money that they actually earned from selling items off the grid. I dont think as a ‘buisness’ APEZ would still be around yes APEZ is a buisness they handle as a 3rd party sales for you. They arent anything like a bank.

    As for the ATM bank terminals its honestly about time that something was done. As LL said there is nothing to stop anyone from just getting bunch of ATM vendors and dropping them around suckering in people who dont think it thru before dropping their money in there. TBH I foresee them all going I highly doubt there is any REAL WORLD Banks/Fiancial instituions that are actually handing SL currency. As LL said if they can prove it…. Kudos to LL on ending to what I look at as just another method of scamming money outta people with promises of glory and getting rich quick.

  33. Marianne McCann says:

    *Great* move! An someone who did lose a couple thousand Lindens to Ginko, I applaud the move!

  34. Ceera Murakami says:

    Very glad to see this. LL should have made this move years ago. I’ve said for some time that trusting your money to an unregulated, completely anonymous “bank” inside SL was more risky than handing your wallet to a stranger on the subway, and asking if they would consider paying you interest on your money.

    I do think that you will need to give the ‘banks’ a little more time, however, to shut down in an orderly fashion. I seriously doubt any of them have enough cash on hand to cover their deposits, so this will surely cause quite a ‘run on the banks’, as depositors rush to get their funds back.

    RE Tim’s comment on post 14, if they prohibit selling L$ for real money, many, if not all, of the high-end merchants in SL will pack it up and leave. I know there would certainly be no reason for me to continue bulding sims and creating textures in SL, if I couldn’t use that to finance my land tier and my in-world expenses. Maybe for you, it makes no difference. But can you imagine the impact on SL if Anshe Chung, who owns more private islands and more mainland parcels tnan anyone else in SL, decided to fold her operations as being no longer profitable? There are individuals who have invested literally MILLIONS of real dollars in SL, and who, if they couldn’t cash out, would lose that in a heartbeat.

    The ability to cash out your L$ is one of the few things that gives SL a competitive edge acainst the other virtual 3D chatrooms and similar venues. It’s a vital aspect attracting new and innovative content creators. Only a small percentage of SL Players actually make a profit each month. But the ones who do would be sorely missed if they packed up and went away.

  35. o.h. says:

    this is very necessary, there are many dangers around that people arent really aware off. have a look here for example: http://en.wikipedia.org/wiki/Ponzi_scheme

  36. Damen Hax says:

    I completely understand, as should anyone with any common sense. A wise move and LL will be thanked silently from many I would think.

    Someone mentioned all this censorship.. You must have some basic rules, think about it for a sec.

  37. Echo says:

    Clarification about ATM’s from Apez, SLEX, and the like from LL please. Residents can speculate about it all day, but we need OFFICIAL CLARIFICATION on these!!

  38. RobbyRacoon says:

    Whoah. I can’t wait to see how this all shakes out, though it seems to me that pretty much everyone should have seen this coming.

    I anticipate huge numbers of very angry people, and a whole lot of “banks” collapsing under this news.

    /me grabs the bowl of popcorn, and watches avidly.

  39. Ann Otoole says:

    the suggestion of removing in world currency to go through such services as paypal is idiotic. such a move would kill the economy entirely since all you have to do to kill someone in paypal is file a dispute on them and then never resolve it. the account griefing to kill off competitors would be instant and the end of all commerce in sl would be complete withing a month.

    on top of the blatantly obvious information i just mentioned… SL thrives because of the micro payments model. paypal is not going to welcome their system being burdened by one cent transactions. not to mention paypal is pretty much a USA thing and is not very well globalized so such a tard move would kill off almost anyone except USA merchants.

  40. Stephen Zenith says:

    Interesting that the WSE closed 2 days ago for an upgrade…

  41. I think it’s a good step to take.
    But on the other hand, how will anybody know wich bank is registrated and still may continue to operate, and wich aren’t ??

    I hope that the staff of LL will be so kindly to clarify this, and put up a list somewhere, so every resident get’s a chance to remove his / her hard earned ( or perhaps bought L$ ).

  42. Heuvadoches Naumova says:

    I believe that WSE would fall under the term “Bank”, since part of their charter states that they are not a secured investment firm.

  43. Ann Otoole says:

    the suggestion of removing in world currency to go through such services as paypal is not thought through. such a move would destroy the SL economy entirely since all you have to do to shut someone down in paypal is file a dispute on them and then never resolve it. the account griefing to shut off competitors would be instant and the end of all commerce in sl would be complete withing a month.

    on top of the blatantly obvious information i just mentioned… SL thrives because of the micro payments model. paypal is not going to welcome their system being burdened by one cent transactions. not to mention paypal is pretty much a USA thing and is not very well globalized so such a move would shut off almost anyone except USA merchants.

  44. Alicia Sautereau says:

    WSE is a bank and financial service provider so toasted popcorn aswell

    /me sits back to watch history in the making 🙂

  45. Berry Steinhoff says:

    Bravo, Linden Lab! The only negative here is that of a potential mass exodus of all those running “banking schemes” within Second Life, to the probable detriment of all those who have invested.

    However, excellent decision Linden Lab.

  46. Thanks LL on finally treating a gaping wound in SL that has been open far, far too long.

    Now y’all just need to address fair use of sim avatar allocation resources. IE mainland camping chairs. 🙂

  47. maggie mcardle says:

    Why not just ban the practice?
    it is obvious that, just like gambling, ther eis no way to regulate it. there needs to be a way to hold those who wish to open these banks responsible for their actions.

  48. Katrina says:

    Bravo! I, for one, am CURRENTLY being ripped off by a bank IMO *Cough* BTN *cough* and have had limited to no access to my lindens since October. I think the Linden’s must really tighten the belts and rights of those who are playing banker. Despite what people want to believe, if you want to play real life then you must expect real life rules to come into play.

  49. Lindal Kidd says:

    1. Good for you, LL. It’s a little late in coming, but this will protect a lot of innocents from getting fleeced.

    2. We need more information on what’s required to “charter” a virtual bank. Would posting a performance bond that’s at least large enough to cover deposits do the job? I don’t think you should require actual government registration…after all, we are talking about a virtual currency here. You don’t want some government deciding that the linden dollar is actually a legitimate currency, subject to regulation, reporting, and taxation.

    3. To #19 and others who want to stop the exchange of linden dollars for US currency: doing so would completely destroy SL…maybe not the platform itself, but certainly the online society that the platform supports. The fact that you can actually make money here is the key factor that separates SL from all other MMOGs and makes it unique. Don’t do it, LL!!

    4. To those who claim this is “censorship”: Get real. I mean that literally…in the real world, sometimes you have to stop something because it’s hurting a lot of people. Yes, maybe those people “ought to have known better” or “were taking an informed risk”. Maybe the “bankers” freedoms are being curtailed. But is the freedom to rob the unwary or innocent one that you need? Or want your neighbor to have? Just as we have laws against that sort of thing in RL, it’s become apparent that we need some in SL as well. It’s a virtual world, a new world…but human nature is still the same.

  50. Allana Dion says:

    When you deposit your money in one of these “banks”, it doesn’t stay there. They use your money to make investments. None of these banks are going to be able to liquidate all of the investments they’ve made with your money in time to be able to even pay back what people have deposited, much less any interest that was promised.

    If you’ve been foolish enough to give any of these banks your money, you’d better move faster than the bankers now. Pull out what you have before they just shut the doors and run, because that’s what many of them WILL do, if not all.

    Unfortunately this was necessary. I’m glad LL finally laid down the law and are shutting these scams down. Honestly if you’re an “investor” (sucker) and you didn’t see this coming, can you blame anyone but yourself?

  51. o.h. says:

    about paypal however, i am european and i have worked on that for three months now… it will work any day now, but three months is jsut insane…
    now that doesnt mean id ever go and trust some anonymous stranger who maybe has a fancy website with my money, but i think its really time to look into some alternatives for europe, since linden labs reasoned with the fact that european population is exploding when intruducing VAT.

  52. RHAS says:

    Yes so very reasonable and good from LL.

    MORONS, they say they do it to protect people well i always payed shop rent from the interest i got. Im probably losing my shop. There will be a huge run on the banks so eventually they will run out of money, thus creating the problem they (LL) are trying to solve.
    They make this annoucement after the wse is closed for 30 days so nobody is able to get their money there!!!!!!!!!! NICE WORK LL ….. NOT!!!!!!!!!!!!!!!

  53. Contra Demonia says:

    I am so glad that the banks are being shut down. I was approached recently by a stranger asking me to open a “bank account” and it just seemed incredibly puzzling to me. In RL one of the primary reason to have a bank account is to have a safe place to store one’s money. It would be insane if everyone had to accept their paychecks in actual bills and then store that physical cash in the house. And how would one pay for big ticket items, such as a house? Would you have to show up at settlement carrying several suitcases full of cash?

    Banks in RL provide a valuable service by reducing the physical size of payments for large transactions – a check is much easier to handle than several crates of coins or bills! They also provide safety for money, since it is harder to physically steal money from a bank than it is from under someone’s mattress.

    But in SL there is no physical component to the L$. It’s just a number associated with your account. The most physical it gets is the atoms used to form the colored number in the upper right corner of your display. So there is no convenience factor to using a bank at all. There is no nead for checks and there is no need for physical security of the money.

    Once safety and convenience is removed, the only other function of a bank is as an investment. Unfortunately for those who have utopian vision of a perfect SL where everyone can do anything they want but no one harms anyone else, that is simply not human nature. If there are no rules, some people will use that freedom to take advantage of others.

    That is why there are real world regulations concerning banking & investments. You can still create any object you desire in SL. But certain business methods are being at least slightly curtailed. This isn’t about destroying your creativity, it’s about protecting us from each other.

    As for closing LindEx, that’s just crazy. It’s not the same as a bank. LindEx offers a way to convert from real currency to Lindens and back again. Since we buy the Lindens in the first place the Lindens form a functional product. By converting them back to US $, we are simply reselling that product. That the exchange rate fluctuates is simply a matter of supply and demand. The LindEx is not offering any interest on their accounts, nor are the L$ investment vehicles in and of themselves. LindEx is simply offering a means of facilitating the sale & purchase of the L$ product.

    And of course, stopping the ability to convert back and forth from L$ to US$ would cripple the inworld economy. Who would ever buy L$ to use in world if they knew that they had simply given that money to Linden Labs and it would never be seen again? As more and more Avatars come into being in SL, the money supply needs to keep growing, otherwise we will wind up with lots of AVs unable to buy anything. Some increase in monetary supply occurs because of the weekly stipends from Linden Labs, but the greatest increase comes from people buying into the SL economy by converting US$ to L$. If that can no longer occur, then get ready to see a collapse of the SL economy.

  54. Sensual Fold says:

    While u are raking this issue ove the coals…finally, go back to the gambling issue and crack down on it again…many are ignoring the ban and contiuing on gambling…Scan the game closer…get rid of it.

  55. LadyJane Bailey says:

    Well I for one am glad of this new policy… I had lost a great deal of lindens in one of these Virtual banks cause the owner ran off with the monies and disabled the ATMS.

    This policy wouldn’t have been needed if these (referring to those banks that were dishonest) inworld banks were honest and didn’t try to cheat users out of their lindens…

    So I’m glad they did this. It then will make sure that banks are now run by people who know what they are doing and know the law…

  56. les says:

    I’m not sure there is a need for this. L is not real money right? It’s game tokens right? How can this be chartered and registered? Do you mean you will accept a RL chartered bank to set up here to trade these private game tokens of your’s? What bank in their right mind would offer financial services for a currancy that is privatly owned and minted to be sold at will?

    um… how about none!

    ..anyway while you sweep things under the rug (2 years too late), why not include the stock exhanges instead of going through all this again in the future. Everyone loves a failed IPO 🙂

  57. hosanah! at last linden understands that second life cannot remain a no law place!
    we have been heard! next step will be to get rid of both unscrupulous owners who behiave like mafia
    many people using same avatar to abuse other residents, an odd way.
    feel free to im me or jasmin Wise for further explanations and help if you need to put the appropriate claims
    we want to play in a safe and clean environment
    i want to be able to do in sl what i cannot do in rl does not mean, i am willing to become a virtual criminal

  58. maggie mcardle says:

    ok i stand corrected, re read the post….and its about time.

    as Lindal stated to the ones crying “censorship” obviously didnt lose any money in the Ginko “crash” of ’07….

  59. Good move. LL has a responsibility to protect the residents, and most banks operated as a pyramidal scheme with only one winner.

  60. Swan Legend says:

    “Usually, we don’t step in the middle of Resident-to-Resident conduct – letting Residents decide how to act, live, or play in Second Life.

    But . . ”

    how do they even make statements like that with a straight face?
    yeah i reckon you do step in and step all over us when it suits you LL. You love playing thought police on your own platform. Then leave us to fend off griefers with a crap AR system and perm hardware bans that they easily work around.
    im fine with this new policy. I am not however ok with the hypocrisy.

  61. Icarius Catteneo says:

    Like many other games that rip out some big money making feature.. this will most likely make the people effected turn tail and flee… unfortunately, in this case, these people fleeing have the money of dozens, if not hundreds, of other people. While some of them may have the morality to return this money, most will not. Thus, because of this action on LL’s part… we will now most likely see many people losing all their hard earned linden dollars, because their “bank” ran off with them. Linden Labs won’t give any support.. just as they didn’t give me any support when our “Wedding planner” ran off with 30k lindens and no service, and she event admitted that she did it to scam us!

  62. Lindal Kidd says:

    To those who want to see a list of “approved” banks…

    1. There are, at present, NO approved SL banks, AFAIK. Any “bank” would have to get chartered in order to remain in business after Jan 22. (by “bank”, I mean the same thing LL does — a resident or group who solicits deposits and promises to pay interest or dividends on those deposits. I do NOT mean organizations like SL Exchange, who do not pay interest.)

    2. Assume that, in the future, some people do establish SL banks under the new rules. We may or may not need a published list of “approved” banks. It would, however, be a nice safety check. I could see if “The First SL Bank and Trust Co.” is listed, or if it’s some fly by night con.

  63. Pingback: Commentary: Linden Lab Cracks Down on Unlicesed “Banks” | Virtually Blind | Virtual Law

  64. Stephen Zenith says:

    I just wonder if LL will allow banks and the like to operate ATMs soley for getting money out, as long as no new payments are accepted? 2 weeks is far too little time to liquidate all of their assets in any sensible manner.

  65. Oryx Tempel says:

    Way to go LL! Thanks for stepping up to the plate. 🙂

  66. Pingback: Big banking news from Second Life | The Life and Times of a Credit Union Employee

  67. Allana Dion says:

    Rhas: >”They make this annoucement after the wse is closed for 30 days so nobody is able to get their money there!”

    Tell me you’re not naive enough to think that’s just coincidence. o.O

    Obviously someone with WSE had a tip off that this was coming.

  68. kenny Stringer says:

    This Is Anouther Act of War agaist us players !!!What Next Linden Labs is Destorery them Selveves

  69. Martin Magpie says:

    Well done Lindens 🙂

    Mar/Cat

  70. James8 Halderman says:

    Do the people who already put L$ in these banks get compensated for what they lost?

  71. Jay Karlfeldt says:

    I am concerned for those Banks which wish to become legitimate or wish to form in the future who are resident outside the USA, will Lindens recognise all the world’s financial institutes, including the african banks that currently scam the world with offers of multimillions of dollars.
    Is there anyway to legitamise Mortgage organistions to provide capital for virtual land and property?
    Virtual life, like real life, requires that people evaluate risks and make decisions based on their evaluations. Wake up and feel the rain, life is sometimes a bitch and there are crooks out there.
    I personally am not involved or connected to any of the Banking or Stock Exchanes in SL.
    Please remember “Caveat emptor”.

  72. RHAS says:

    I worked my freaking butt off for money i have currently deposited at wse. The wse went down for upgrades for 30 days lasting untill about 7 Feb. LL gives us time to withdraw and take care untill 22 Jan. Thus leaving all WSE customers (all 26000) in the dark and not able to get their money. BECAUSE OF YOUR POLICY IM LOSING MONEY NOW!!
    Ever considered that LL? Casino`s always came with dancepads so the basic account holder was able to get a buck aswell. ->Removed.
    Banks provided interest so basic account holders were able to get some form of weekly payment –> also removed. Is it your ultimate policy to remove all the money and economy from SL? Making it into a teen playground and a mature sexplot only? This sucks so bad i cannot even begin to describe it.

  73. Morphine says:

    what the hell have you done LL ???? byby SL it was nice knowing you.

  74. addax says:

    is it wrong of me to say the only fools are the people who put money into these things ??

    Bottom line – you fall for it .. you pay for it

  75. Eshi Otawara says:

    Good move. Those of you who are worried about not being able to be something in SL that you are not in 1st life, you can always log in and ‘play a person who is ‘not pissed off’- so there’s your substitute.

    I cannot wait to see more steps be taken in order to define what exactly within SL *is* a ‘game’ and what is not. From my personal experience, I am pretty sick ad tired of the ‘inverted iceberg’ phenomenon of wannabe celebrity/executive charlatans which are making true professionals who are investing their actual knowledge and expertise into virtual worlds look like ‘gamers’.

  76. Has the run on bank ATMs started yet? I may have to log in to see this!

  77. with respect the policy is too shady in the retro spec that this policy comes after the fact that theres been no communication too the other party effected in this policy has consideration been done for them nope. does this give them time too conform too the new policy nope just shows that its wasnt given the 30day notice that policy are supposed too be given.

  78. Darien Caldwell says:

    I think there was little alternative but to do this. SL will only benefit in the long term. To those saying the ‘banking institutions’ will need more time to liquidate their assets, I think it’s a rather moot point. Given a month or 6 months, you can’t liquidate that which you don’t have. The money is already gone.

  79. riona says:

    OK … whats next?
    I fully agree with the dismiss of this… joke called bank BUT whats next? clubbing? escorting? poseballs? chatting?

    come on…

  80. Problematic policy!

    This causes us, as a virtual bank a major headache.

    However, fortunately WE ARE THE SLIB!
    That means, even tho we offered high yield, our gains were far greater, and are able to honor 100% with some management time, and liquidation time, and we are already in full compliance.

    This is MAJOR BAD NEWS, it should’ve been a lot softer, to let business owners adjust. Unfortunately, some will bankrupt and that means a lot of people loose 100% of their funds now, or their businesses.

    I hope this does not have worse fallout on the SL economy by lots of business owners bankrupt.

    As for me personally, i am already working to realize my contingency plans i planned a long time ago, for in case something like this happens.

  81. Keiko Rau says:

    @16 I run nothing but ethical businesses in SL and agree (as I said in the post) with this policy. I think that the effect of all the banks collapsing together is going to have a an unfortunate effect on the econnoomy, which still has not recovered from the last policy announcement.

    What you (and many others) havnt realised is that once you start censoring the content, you are responsible for it. Its not just banks and casinos that are subject to regulation – once you regulate one, you have to regulate them all for the exact same legal reasons. At what point does LL draw the line between protecting themselves allowing the users to exercise their imagination?

    Prohibiting unlicensed casinos and banks is one thing, but what about the rest? In the real world, banks and casinos are subject to law and regulation, and so are stock exchanges, real estate agents, clubs, shops, and all other forms of business. How much imagination will be left, I wonder.

  82. Eshi Otawara says:

    @ addax- if someone is ‘blind’ – it doesn’t mean someone has a green light to run them over.

  83. Aminom Marvin says:

    It’s about time! SL banks are simple ponzi schemes. Action on this should have been taken much sooner.

  84. Konner McDonnell says:

    “Thus, as we did in the past with gambling, as of January 22, 2008 we will begin removing any virtual ATMs or other objects that facilitate the operation or facilitation of in-world “banking,” i.e., the offering of interest or a rate of return on L$ invested or deposited.”

    First, gambling didn’t stop. People just pay “piggies” now instead of the board. While overt “banks” and “institutions with ATMs that offer interest” will be removed. People will start paying trees and mailboxes. It’ll go underground.

    I should also mention that exchanges that do not offer interest will not be hindered. The WSE offers “WICS” which is an internet currency independent from the linden dollar. If WSE wants to pay interest on these WICS then LL will have nothing to say about that. Honestly, I think this is going to do much more good than harm for those visionaries like WSE. We’ll see if I’m wrong.

  85. Swan Legend says:

    i think this was neccessary but i swear to god if i see one more “policy” enacted im gonna tell LL to take ALL their polices and stick them where the sun doesnt shine. Im really tired of hearing about new “polices” LEAVE US THE HELL ALONE.

  86. Rora Kumaki says:

    Ok, just buying land on your personally owned regions is a huge risk to third parties. Atleast with the banks it says, they are owned by other SLers and that the risk is your own.

    How about alleviating the risk you guys DO have control of first instead of worrying about what we in world do.

    Because for someone so worried about the risk of SLers, you sure don’t have a problem with us getting screwed by region owners when we spend hundreds of US on land only to have then strip it away from us the next day without any retribution, and all you guys claim is.. it’s a third party deal, we can’t control that, SORRY!

    The only reason in my eyes you are doing this is to have more control over people and how they multiply their linden growth that leaves you out of the loop.

    Sorry, but it’s the truth. Same thing with the gambling. I think SL needs to decide.. you either let us make our own decisions about the risks we make, or you start covering our asses when the risk is on you.

  87. Luxette Maximus says:

    Yes, it was a smart move. Good Job LL.

  88. Renee Faulds says:

    I see Linden Labs is playing right back into the hands of the big ( legal RL) corporate banks. These corporations will buy SIMS and Linden Labs will make more money, prob take a cut too like they did for pawn shops.

    While I agree regulation is needed – the continued takeover (uummmm “turnover) of business in SL to big RL corporations will lead directly to it’s downfall.

    Oh by the way “FIX SL”

    Renee’s Rant

  89. Serenarra Trilling says:

    Bravo LL! It should have been done long before this.

    My only question (and not at all meant to be rhetorical, it would be nice to actually get an answer):

    Is ANYTHING going to be done about all the so-called “banks” that are now operating who just take their money and run? Will there be any punishment for the theives, or renumeration for the victims?

    You know there are going to be thousands of members who lose thousands of $US over this. This has been caused by the fact that LL has allowed these people to continue illegal operations for years.

    I expect the answer will be “no, you took the risk, LL will do nothing”. I think that will be a true outrage, and hope that I am wrong.

  90. SLIB Press Event about new LL Banking Policy, 12:10PM PST Sharp at SLIB HQ. http://slurl.com/secondlife/Ranthambore/237/225/38

  91. Brilliant news, about time those crooks were stopped.

  92. JZ Paine says:

    Obvious, the folks against this are the folks who are probably running around finding their ATM’s and deleting them so they don’t get caught!

    Watches as furries dressed as police officers run after them with whistles blowing and batons flying…. go get them scoundrals!

  93. Phoxpaws Vollmer says:

    This will just start another run on the banks like the no gambling proclamation did. Better get you money out while you can or end up loosing it. And at a max of 100k a day, that is a lot of money people stand to loose. But then, they were stupid to put their money in unregulated banks, weren’t they?

  94. Korwyn Obscure says:

    @#1 and others…

    Apex and SLX’s atms do not meet this standard being presented because they may take a payment but they are a merchant system, not a bank.

    They do not offer any interest on the money you have in their system. Only what is there.

    To everyone else who may complain about this.

    The outcry after the GINKO fallout has been very great, and it’s made the news, slashdot, and all that.

    You may want responsibility for your decisions but people also want to hold the banks responsible and they want Linden Labs to do something about it.

    You can’t have your cake and eat it too sometimes. The outcry has been heard and they’ve answered with a GOOD Answer. No more banks cause they are not FDIC or anything insured.

    They say a fool and their money are soon parted.

    But really, people have been asking for this.

  95. Milz Yue says:

    and another knife in the heart of sl
    how long can it bleed till death

  96. Mikelo Serevi says:

    I’m glad you did this. Sometimes authority needs to stop the abuse of freedom. Those of us who aren’t scammers thank you.

  97. Madelena Rossini says:

    Anyone with an ounce of common sense could see that this was coming. What remains to be seen is how terrible a rush will occur on existing banks in the aftermath of this announcement and whether or not every existing depositor will get their money back.

    The announcement does not seem to currently apply to stock exchanges, but I suspect it eventually will.

    What I am confused about it the issue over Second Life v The Grid. I thought that LL’s ultimate goal was to run the Grid and to possibly even sell Second Life altogether. Why are they still getting involved in legislation which will ultimately not be enforceable on the whole Grid anymore than it is on the whole web? What are LL’s priorities right now?

  98. Hiro Queso says:

    Great move LL!

    @69 Why are you asking for compensation here? If you have ‘invested’ money with another resident in SL, then you need to approach them to get your money back. There’s no practical reason why investors can’t get their money back from these individuals, either via ATM or directly after January 22, and I applaud LL for giving substantial notice. If you are unable to get money from who ever you have ‘invested’ in, that’s a matter between you and them.

    I’m not unsympathetic to anyone who lose out to these crooks, but those who do lose out also have to be aware that the blame does not lie with LL.

  99. In all honesty, I was amazed this wasn’t done before. Yes, even I am shocked that I actually agree. Why? Well…first off I would NEVER put my money into a SL bank unless it was backed up by something that GUARANTEED that I was not going to get majorly ripped off by a SL scam artist. I don’t see this as some sort of “Linden Rise To Domination Over Us “Little” People”. Till something is figured out lets just forgo the get rich bank scams.

    And don’t forget that they did say “without proof of an applicable government registration statement or financial institution charter”. That is major added protection to peoples investments.

    As for such services as the slx, onrez, etc. I HIGHLY doubt that gaining access to money made via these such things are in jepordy.

    Oh, one more thing. Keep lindens in world & have no exchange? (I thought I read that a bunch of comments back..I don’t feel like looking again LOL) Can we say “downfall”? Really not a good suggestion there LOL.

  100. Js says:

    Might aswell call it an end to Second Life… Let’s all leave now while SL is ahead..

  101. Pingback: Banqueroute « SecondLife Observer France- SLObserver.com

  102. Allan Saltwater says:

    “As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. We’re implementing this policy after reviewing Resident complaints, banking activities, and the law, and we’re doing it to protect our Residents and the integrity of our economy.”

    Which government is applicable here?

  103. Masuyo Aabye says:

    if anyone is stupid enough to deposit any mony in a n SL bank then they deserve to lose thier money.
    this is a good move from LL.
    any bank on SL could just be a person who says “hey, i’m a bank” and take your l$
    they are not real banks unless they are recognised in RL as banking institutes, and as far as we all know, no SL bank is an RL bank. whats the point anyway? you keep the l$ in your account, it’s not like somebody can mug you for your l$.

  104. funkysharknation says:

    Good choice,

    it does not affect trustfull money traders with inworld terminals like SLX or Bulido , but stops the high risk for whole community.

    The end of these “banks” will clearly show about their real account backups.

    AND: if there are people offering that want to offer interest on SL-projects, they still can have a business place. they still can put their informaion into SL. They still can offer RL shares and even give a SL interface to a RL share trade…

    so, good choice
    Ralf

  105. Uccello Poultry says:

    Probably no chance of LL giving a one-time good-faith payment to those of us that were caught by Ginko …

  106. Kyder Ling says:

    #94 wrote:
    “and another knife in the heart of sl
    how long can it bleed till death”

    Okay, sorry, but I laughed at this one…

    Seriously, I don’t understand all the trouble this has been causing but I really am loving the puffed up complaints. “Oh, so these so called banks now must get registration papers before opening doors. Bah, this is blasphemy, this is madness, this is Sparta! Boo LL!”

    Look guys, everyone knows that keeping all your money under your mattress at home isn’t smart, so we keep it in banks to keep it safe (and get like .001% interest). However, inside of SL, our money is already safe behind our account passwords and as long as you keep that nice and safe and change it every so often, I don’t see what’s he purpose of trying to ask for more from a possibly shady company.

    if you want to invest, do so in the real world, where you get actual phone numbers, actual customer service, and actual FDIC insurance…

  107. Swythe Armistice says:

    What this does is solve nothing, real banks are prone to scamming and screwing people over just as much as SL banks.

    If anything, this just makes it harder for new business to get a footing in the SL world.

    I lost over 1,000USD in ginkos, but I’m not about ready to require SL companies to deal with he red tape the world governments have for banking.

    This also ruins it for the people who are honestly running their banks, but are unable to acquire a banking licenses or government approval where they live. To even get the license costs a lot of time and money. Money and time that could be spent on the initial investments to make the bank more stable.

    I can see a large portion of the L$ exchange vanishing because of this.

  108. Masuyo Aabye says:

    ” 55 les Says:
    January 8th, 2008 at 11:42 AM PST

    I’m not sure there is a need for this. L is not real money right? It’s game tokens right? How can this be chartered and registered? Do you mean you will accept a RL chartered bank to set up here to trade these private game tokens of your’s? What bank in their right mind would offer financial services for a currancy that is privatly owned and minted to be sold at will?

    um… how about none!

    ..anyway while you sweep things under the rug (2 years too late), why not include the stock exhanges instead of going through all this again in the future. Everyone loves a failed IPO ”

    you do realise you can exchange L$ into $ right? and pay it into paypal then into your bank? which is likely why most of these scam banks where started in the 1st place, to rip people off and cash in.

  109. Vector Spaight says:

    One may argue that the ban on gambling caused the Ginko collapse. One may even say that it was inevitable, a classic ponzi scheme, and the run on the banks hastened it.

    In any case, I now feel happy that I’ve already removed all my assets from the WSE bank after deciding their interest rate was just too good to be true; after losing a lt of money in the Ginko Financial ponzi scheme, I didn’t want to lose any more in what was shaping up to be just another, more elaborate scam.

    I do think that LL should have given more of a notice on this, as a lot of residents will inevitably lose a lot of money as the banks are run on, and the ponzi schemes out there collapse in on themselves, and the ‘bankers’ go away with a lot of money just like Ginko’s did. I also think that they should either help those that want to do banking find the tools to do so, or go ahead and regulate banking themselves.

  110. Kyder Ling says:

    #106 wrote:
    “What this does is solve nothing, real banks are prone to scamming and screwing people over just as much as SL banks.”

    Sorry, but I work at a bank… there is really no way we can screw our customers and get extra money from them without it being very obvious. I really want to know which banks your talking about, because I bet they are not insured like the big banks are, by FDIC…

  111. simba fuhr says:

    And when the camping restriction comes to SL ? Pleeease soon

  112. CW says:

    Please Linden Labs will this ban affect exchanges like ISE, I want to make sure my shareholders get there initial invest back and would need to freeze the stock to get an acurrate list of who owns my stock so that I can repay their investment. Please let my company and other companies know this.

  113. Land Shepherd says:

    Bad move. Don’t like the banks and can’t endorse them but its just another nail in the coffin in the freedom that used to be here in SL. OK, lets get rid of the sex and violence here next then. Lets just have 4096sq.m. parcels with cottages and gardens and happiness.

  114. Farallon Greyskin says:

    Wow, all the people that lost money in ginko and now.. EVERYONE in ANY bank or stock exhange will lose nearly everything due to this sudden change in policy.

    That’s just Wow…

    Not sure off the top of my head how this could have been handled smoother such that every thing didn’t have a run at the same time but.. Wow that’s a big ban hammer.

    Banning gambling affected mostly the casino owners, this affects the /users/ directly by causing a simultanious total SL bank failure all at once O.O

  115. Bee Mizser says:

    Great! Fantastic! About bloody time.

    Whilst I pity those who had money in the WSE who will now almost certainly never get it back, I suspect the 30 days would have become 60, would have become 90 etc. etc. In other words I think WSE has possibly done a Ginko on everyone.

    To all you whiners, how many more people should be ripped off by FRAUDSTERS?

    I look forward to new financial institutions emerging, based on RW banks and stock exchanges, offering real investments and not schemes where the only person who gets rich is the “owner” of the bank

  116. Tasrill Sieyes says:

    *stands up and claps loudly for the first sane thing LL has done in a long time*

  117. Raban Laborde says:

    This step was overdue. Well done, Lindens.

  118. JR Unknown says:

    Great job LL!! Get the scammers out of the game so the rest of us can run our legitimate businesses. It was only a matter of time before this happened and very important to the longevity of SL. Are stock exchanges next??? 🙂

  119. Katt Kongo says:

    What did you all expect? Even the west wasn’t wild forever.

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  121. Farallon Greyskin says:

    #114

    Actually I agree, non regulated banking in SL was a HUGE mistake on LLs part to not catch and kill earlier.

    But I’m not sure LL really did anyone any favors in causing an instantanious failure of every bank today. A more measured approach might have been called for…

  122. Hechicero Blanco says:

    Ok, so where does that leave JTF and First Meta? I am sure they will be in the middle of this as well.

  123. Smiley Barry says:

    Finally, you act like you SHOULD, Linden! You’ve improved the graphics a billion times, but what about the experience itself? Finally you take charge and end what shouldn’t have started in the first place.

    But, please note this:

    DO NOT remove A.T.Ms related to online commerce in current integration with Second Life, or simpler, services similar to OnRez. These are not banks, they are simple commerce services, available online, requiring the user to go through a “pipelining” system of funds, though some users choose to add more than needed for future purchases.

    Boy, that “warning” was long, eh? 🙂

  124. peteh gabe says:

    and what about people that have thousands of L$ invested in these banks?what about my money now?
    i thought we could find some freedom at sl but everyday that freedom is being lost..

  125. addax says:

    why not build a 20m high wall around your nice house and stay in doors all day in case something bad happens .. oops seems they don’t allow mega prims

    Welcome to Utopia

  126. Ai Kikuchiyo says:

    So what happened to the people who have been ripped off by these “banking institutions”? What happens with the money and/or land that has been outright stolen from them? Do they get any remedy at all? Or are they expected to just eat the losses?

    I say this because I was ripped off almost a year ago by someone who gave me a loan for some land, and turned around and stole the land from me after refusing to let me pay off the balance. This was a loss of about 25K L$ on my part. And when I asked for help, Linden Labs did nothing.

  127. Swythe Armistice says:

    #109

    Banks screw people over using auto-billing features and by changing the date. Through charging double for something, or just by holding accounts for no reasons (paypal). They also have nearly impossible overrate rates that clients who make a meager living usually cannot match.

    And not all banks are FDIC regulated. Many global banks do not care about that insurance, and still operate in the united states. FDIC is only in the united states. Claiming the FDIC is reliable only applies to banking in the US.

    I know people who have had their entire accounts locked because auto billing dates were changed, or delayed purposely.

    The chances of you being screwed over in First Life are just as good as Second Life. No government regulation will change this.

  128. Drako Nagorski says:

    hmmmmm sounds bad for anyone investing! i can bet money (oops thats banned :0) that some bank owners will:
    1)move Ls to USD.
    2)close account.
    3)open new account.
    4)move USD to Ls.

    yay LL 😀

  129. Hern Worsley says:

    It is unfortunate that the liberties SL offered vs RL are being abused by a minority and so in time are being taken away.
    However i support this move and i would support further intervention by LL or another regulating body to protect the residents of SL from the current “wild west” attitude within SL where people are scamming and thieving for a fast buck at the expense of good honest SL residents and content creators. Shame on you if you are on of them but your just too stupid to be given freedoms.

  130. KittyMarie Novi says:

    I can see why LL as decided to do this. There is simply too many scammers and people trying to fraud everyone. I personally have only used WSE a few times and just to see what it was like. Frankly I was not impressed so after about 2 months I withdrew the money I put in which was next to nothing in value.

    So for anyone that is NOT getting there money back. If the company is US based and you indeed lost money. I would take legal action if you think you got a case. If enough WSE user come together there could be a big enough law suit on your hands. That stock exchange was passing around alot of money!

  131. Ryan DuCasse says:

    WTF?!?!!? – SL is turing into a lame lil goverment ran system – if no one else sees it, sorry : but its turning into america – everything that we do in SL is now being controlled by lindens. This is bad, if the bank cant honstly pay back the intrest, DONT GO WITH THEM. its not a real bank, so their not required to do JACK_S lol. this is SL, risk are involved, and if you get scamed or cheated, tell your firends so they wont get the same.

  132. Funny Money says:

    Step by step they act as though L$ are real for the community yet treat it as funny money for themselves.

    Why?

    Because it’s against the law to print USD but totally ok to print L$.

    So they will regulate the L$ in the community as if it’s real and treat it as if it’s fake for themselves as long as they can so they can continue printing L$

    Sex will be next because PayPal will stop doing bussiness with anyone involved in the sex industry, that is if the L$ doesn’t completely die off first.

    Sex is next, don’t kid yourself. Either that or they play under the same rules they dole out and stop printing money, becaus if it’s not money then banks (among other things) are just fine.

    Fake for them real for the community, seems to be this years theme.

  133. kathrin dassin says:

    Honestly, if someone is dumb enough to put their money into such an insititution then they are dumb enough to pay the consequences on it. They have no right to run and bitch to LL or anyone else for being careless with their money.

  134. Lupercaleb Walcher says:

    thaanks

  135. Gully Miles says:

    Great idea, it needed doing.

    Some of the SL “banks” like Ginko are clearly just Ponzi schemes, where “interest” for existing depositors is paid from deposits of new customers, in an unsustainable way.

    I love it that people can play at being whatever they want to be in SL. And I sympathise with people who want to play at being bankers and feel they are being singled out, unfairly, over people who want to play at, say, being nightclub owners. But playing at being a banker is actually quite hard, and there’s a risk involved. If a bank gets it wrong in the real world then its customers have a safety net. In SL there is nothing.

    There are certain things that imply a legal status just by their title — for example, “psychologist”, “doctor”, “lawyer”, “bank”. The reason you trust a real life bank not to take your money and run is because of the legal underpinnings of the title “bank” in real life.

    We need to think carefully about how and whether we allow people to claim to be those things in SL. Without some form of in-world governance or regulation, it’s hard to see how SL-only banks can possibly work.

  136. LOLERSKATES says:

    Anyone who got ripped off should give their head a shake for being so damn greedy in the first place.

    If you were dumb enough to invest in a Ponzi scheme, you are dumb enough to fall victim.

  137. Yay! Finally! **cheer** Linden Lab!! Thanks for taking a responsible step to stop the widespread fraud that has been occurring from these wannabe bankers.

  138. LaeMiQian says:

    SOME (not much, though) sympathy for the ‘investors’. Face it, a game/simulation environment like SL is a far better place for children (I am referring to behavior here, not chronology) to learn the hard facts of economic life than IRL!

    OOPS! That is almost an argument for KEEPING the ‘banks’ 😉

  139. Jupp Betsen says:

    Incompetence or Malice ?

    As with the deliberate ban on wagering (in fact only prohibition to let anyone win) this ban on paying interest on deposits (isn’t there such a prohibition in some holy scripture anyway) while maybe sensible is implemented in a way that may make its way into textbooks as definition of incompetence.

    The way the wagering ban was implemented and accompanied with threats of confiscation made a run on the biggest financial institutions in SL inevitable. BTW Ginko payout out a higher percentage of deposits before default than any real world bank would have managed in similar situation.

    The way this ban on paying interest is implemented will bring about exactly the defaults Lindens claim they fear and cite as reason to step in to prevent in the future.

    Combine this with the TOS who guarantee LL the right to close accounts deliberately – which is freely threatened and applied – then the gross disregard of property by LL makes ever more obvious that doing business in SL is nothing but “wagering” in disguise.

    This will requires US financial institutions like CC companies and Paypal to cut links with SL. This move will now sooner rather than later become unavoidable for these financial institutions. The threat of a lawsuit might be enough for them to err on the save side and discontinue their services in connection with SL.

    Good Luck to LL for surviving this.

  140. Silverblade Dagger says:

    I think LL is completely irresponsible in dealing with this. As usual, things get worse because LL fails to plan ahead. Honestly run banks are going to get hurt by this, and in the end, honest investors and customers. LL needs to get their heads out of their posteriors and think before they act.
    Honoris Causa…
    Silverblade Dagger

  141. Luthien Unsung says:

    Great move on the banks policy there LL.
    .
    Now what are you going to do about all the fruadulent “private” land sales on privately owned sims? Every week in the forums are complaints by users who have “purchased” privately owned sims/ island/ land and had them yanked from under them by unscrupulous land owners, who in turn are doing a runner with literally thousands of user’s US$.
    Please consider doing something about this very common and deplorable problem.

  142. Ann Otoole says:

    /me munches popcorn watching all the nigerian barrister michaels running around trying to figure out the next way to scam foolish people who think there is something to be gained from no effort.

  143. Bee Mizser says:

    @138 I have never seen so much bollocks in my life.

    CC companies and paypal will be re-assured because they are legally licensed financial institutions who will now be able to enter SL without risk of being tarred with the “ginko” brush.

    Expect to see RL banks start to appear in SL. Offering realistic returns on your investment. (not the crazy figures offered by the scammers)

  144. /me puts on green makeup and armor and sings…

    DING! DONG! THE FAKE BANK’S DEAD!
    WHICH FAKE BANK?
    THEY’RE ALL FAKE BANKS!
    DING! DONG! THE THEIVING BANK IS DEAD!

  145. River Ely says:

    Smart move. Too many gullible people have had their SL experience ruined by shark infested bad bank dealings. I support the lindens. Some say that if something is too good to be true (60% Interest), then it is too good to be true. Experienced people recognize that and they have no problems with the absence of such schemes. The inexperienced and gullible need a little protection, and that is what is being done. Genuine Banks, are exempt this change anyway, so for all concerned, true banks are here to stay.

  146. trent tuqiri says:

    If gambling is not allowed, how come its so prevalent?

  147. Broccoli Curry says:

    My only complaint is that it should have been done a long, long time ago.

    Thankyou, Linden Lab.

    Now… about those campers?

  148. Martin Magpie says:

    I think it’s a shame that some put their faith and L$ into others who ripped them off. However LL didn’t just suddenly change policy for no reason.

    http://blog.secondlife.com/2008/01/02/use-caution-in-dealing-with-third-party-l-sites/

    LL is stopping more ppl from being taken. Any unregulated bank in the US is not a bank you should be doing business with.

    Feel free to send me your L$ I offer you no guarantee and no interest. I will simply keep it.

    Have a great day 🙂

    Mar/Cat

  149. Nate says:

    Are you still taking the stance that $L has no real value? Or did you just decide you should step in and decide where every user can or cannot spend their imaginary money?

  150. Sekonda Huet says:

    About bloody time. What a load of nonsense.

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