Bank Ban Needs To Be Amended To Include All Financial Operations.

Ok I waited a few months since the bank ban to see what would happen. We all know LL banned banking back in Jan of 2008, but their ban was so open ended that all the bankers and other operations which lost people hundreds of thousands of real world USD are opening up other operations and doing the exact same thing all over again!

Just this month two “investment funds” shut down operation and ran with invested funds. One stock exchange has left world almost completely and has held, against the wishes of their investors, invested funds for over SIX MONTHS now! Other stock exchanges keep changing the rules and have run off with what some people are estimating to be, $300,000USD, while telling their investors, “sorry, the rules changed, here are some junk bonds!!” Other “funds” are popping up each day and are doing the same things the banks did, but they call themselves “funds” instead of “banks” and when you deposit L$ into their “ATMs” you get “shares” instead of a “balance”, which you can withdraw again later if you are lucky, and then they pay you "dividends" instead of "interest". It is the same thing as the old banks, only with different wording.

The original bank ban goes: “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.” But people are trying to get around this policy via re-wording their notecards and/or changing a few lines of ATM code. They continue to offer close to ZERO transparency, just like the old banks, and few if any, disclose their real world identities. “I have a super investment model which I won’t disclose, but trust me!” Sound familiar?

Lastly, all of these funds, stock exchanges, etc are all ILLEGAL under US SEC.

To avoid further scams and unreliable funds from losing everyone’s money and to protect newcomers to SL and SL itself, LL needs to amend the banking ban to something like: “All financial operations, which would normally be regulated in the real world, are now banned from operating in SL without proof of an applicable government registration statement or financial institution charter.” This stuff is regulated in the real world for a reason.

My question is: When will this be done? Everyday I meet more people who have been scammed by these “investment funds” and “stock exchanges” and this is all months AFTER the bank ban was introduced.

Thanks.

As you pointed out, SL public investment funds and stock markets were never legal to begin with under US federal securities laws. I always wondered how LL could be so lax as to condone their operations in SL. It does them no good to feign ignorance because the investments are made in Linden Dollars rather than US Dollars anymore than it did them any good to feign ignorance regarding the controversy surrounding internet gambling.

The TOS prohibits any unlawful action under Section 4.1 so anyone is free to abuse report these activities to Linden Lab. Even if LL were to adopt a specific prohibition to these kinds of investment funds that is how it would be enforced. You can also file a complaint with the SEC although that might have consequences for SL that you may not want to initiate.

It should be noted that a private investment fund that is essentially a partnership is not prohibited under US federal securities laws. So if for example a bunch of people who know each other decide to create a fund to support SL ventures with the goal of realizing returns on their investments that is ok. And if they happen to personally invite people they now to join the partnership that is ok as well. What they cannot do is make general solicitations for others to invest,

WHY do you keep giving your money to strangers? aren't you disciplined enough to hold onto it yourself?

Yes, a private investment fund AKA "Investment Club" should be fine. I'm part of one in real life. But even with investment clubs, you have to know the REAL WORLD names of those who invest and the clubs are usually limited to 5 - 10 people. Also the "books" are reported to the IRS or similar tax body in your country and capital gains taxes are paid in real life. None of that, though, would be run THROUGH SL, although such a club could invest some of it INTO an SL project like a store or something.

I think LL shouldn't do anything further. A fool and their money are soon parted. May as well teach them a hard lesson.

Is that how it is? The ones who need (in a practical sense) the most protection are necessarily the ones who are least deserving of that protection?

I find it funny that I've been in SL since October, 2005 and have yet to find a person who has been scammed by a "bank" or any other "financial institution".........maybe not funny, but interesting. I talk to almost anyone who wants to talk in world. I've met a lot of people in SL, made a lot of friends but for some quirk of luck I guess none of them ever got taken by some scam like this............or the former banking scandal that got banks banned in the first place. Maybe, it because the people who choose to talk to me or the people I generally hang with are smart enough to NOT give anything of value to ANYONE they do not know...........or I'm just lucky.

I do have thoughts on the people who do bet caught up in things like this. They always seem to be looking for something for nothing. "Hey, put your money in my "bank" (institution whatever) and I'll give you a return on your investment" "Really? Gee that sounds like a good deal..........where do I sign up?"

Never does it seem anyone asks the very important question: "Who the hell are you? Show me some creditials." So, to answer that question "Is that how it is?".........yeah, that's how it is.

I have the same experience, although I did have one friend who was almost seduced -- almost sunk $1,000 U.S. into a dodgy "stock", which was really bad because he is a student. I persuaded him to avoid it. People are seduced by SL itself, and the promise of making money. The ones who succeed financially have roots in SL and understand it.

The thread ended here ^

Well I would give my money to strangers in real life if they had a proven track record of favorable returns on investments for at least 10 years, were monitored and had some regulation over them, and had a high degree of transparency and were themselves heavily invested in their funds....Oh wait I already do that...never mind. I guess I am undisciplined. Discipline me 3Ring! I'm a bad girl!

Have to agree with you on this one.

As a newbie, I saw a bank, saw that I could get interest, and put a few hundred linden on it. After a week or 2 I saw that the interest wasn't that spectacular for such a low amount, so i withdrawed the whole spectacular amount.

Now I am not a stupid fellow, but somehow I did not realize that I was in no position to trust the owner of that bank. Just because it looked professional and spelled Bank, made me deposit. Just like I think I can trust real world banks.

Same goes for the new scams: newbies are easy fooled by a well done logo and professional looking words. It takes a few weeks/months of experience, and reading fora, to know you can easily be scammed by this.

So yes, these money scams should be forbidden and AR-able. But I would want them to forbid estate scams as well for example, so there are many things that are not perfect.

Now I never met a scammed person either. But I do not socialize very often and if I do it is with forum weirdos So I bet there are much more scammed people then we know.

I'm not going to make conclusions about your overall intelligence from one act but the act itself of putting money into a virtual "bank" was foolish and ignorant unless you at least entertained the high probability that it was a ponzi scheme and merely hoped to cash out at the top which is the only place where people can make any money out of it, and acknowledged that at best it was a highly volatile investment and were prepared to lose every penny invested.

It's not Linden Lab's responsibility to protect people from their own foolishness. If you build a foolproof safeguard a greater fool will always come around to confound it and in the end all you have done is put greater restrictions on the community to benefit people that lack common sense.

re: Dakota and Marcel,

No matter what safeguards you put in place, fools will continue to be fools. The Army had a saying..."it's impossible to make something foolproof -- because fools are so ingenious".

Having said that, I will also allow as how I think the current bank ban applies to these new schemes as well. Anything that provides a promised return on invested L$ is a "bank", whether you call it a stock exchange, an investment club, a bank, a savings and loan, or a hamburger.

If the business in question is NOT guaranteeing a return (i.e., the old "past performance is no guarantee of future returns", like they tell you when you buy a mutual fund)...well then, anyone who doesn't research a speculative investment deserves exactly what they get...in the real world or in SL.

Amazes me everyday the LL apologists.

LL made big money off these banking and gambling scams, by accepting money from people doing what is obviously illegal behavior...yet somehow people want to not blame LL, as they run laughing all the way to the Real Life Bank. Just idiotic. Totally fly-by-night behavior.

Typical Rebecca hot air. LL made incidental money from these transactions as part of the LindeX service, or those that held land. They had hoped that the market would produce a better result, but it didn't, so they shut it down. Convenient for you to omit that LL shut down the banking industry. LL is not complicit in EVERY fraud.

LL OWNs everything in SL. of course they are responsible.

"Incidental Money"?? to the tunes of thousands of dollars selling fake "land" for these scammers to operate.

The moment LL saw a "ATM machine" they should have said no way. Instead they allowed the scams to go on.

It's their advertising that convinces people to try SL. They give off an aura of how wonderful Sl is. A newbie comes in and sees "ATM machines" everywhere, and thinks it must be safe, since LL is so "Utopian." Ha ha.

This is LL aiding and abetting crooks. It went on for a long time before LL took action---after a huge heist.

NOTHING can justify LL living in a vaccum and not seeing resident getting ripped off. Same is true with the land bots and many other scams.

People have a reasonable expectation that LL would be protecting them from scams. Second life is NOT the internet. Second Life is a private business. Not only do they have a duty to warn people, they have a duty to instantly remove scams and ban perpetrators not wait a year until many thousands of dollars are lost by naive individuals.

Goodness, Rebecca, still here? For something so low-down, so corrupt, so depraved, so blameworthy... to have you still hanging around, it must have its good side, right?

Or are you simply here in the forums like the bloke with "The End of The World is Nigh" sign, hoping to deliver salvation to those who will follow your hysterical crusade?

Are you so drunk on the LL kool aid you can't see how they are responsible?





Nothing hysterical about telling the truth about the scams in SL and the complicity of LL.

Give me a nudge when you have something new to say. "Kool Aid" and "complicity of LL" are *so* last week.

/me checks my watch............"This is how Blizzard runs things in WoW..........." in 5, 4,3, 2.........

More garbage. Simple ownership does not necessarily equal complicity. Complicity would mean giving these people special breaks or helping them plan. You're just looking for a reason to bitch at LL, and it doesn't matter what LL does, they are always wrong to you.

LOL. Very good, and so are all the same old same old threads on this forum.

Victim posts how they got scammed. and are met by 30 kool aid drinkers calling them morons and fools.

The whole basis of the LL economy for a couple years was Gambling and Banking scams, Escort services. Give me a break!

What a satire.

"So darn reputable!!! I should have known..... after seeing furries running around all over the place, and having sex with donkeys....right there I should have known that I was in with a bad crowd....But NOOOOO! Instead I hung out in the seedier places inworld, observing the pitiful decadence and seeing if there were ways to capitalize on it. "

Seeing LL's blatant illegalities with the Linden$ some enterprising scammers, think of a nice little get-in, get-out scheme ......."Hmmmmm think I'll start a bank and skim money from these sucker perverts, before the Feds make them close down the money exchange."

Yes Mr. Linden, thats right, We need some land to start a chain of banks inside SL? Heres $15.000.00. We'll pay more later." We are being financed by a Phone Company. Yes, thats right. You'll love how we legitmize SL?"

Mr. Linden: Okay sounds good. Afteralll this is all just a fictional currency.

Scammer: Ya got that right! <wink> <wink>

Mr. Linden: <wink> <wink>"

You failed the comedy audition for taking yourself more seriously than any other person alive.

NEXT!

Not very impressive. Simplistic graphics. Very little detail. Very cartoony and everyone looks the same.