Post Ban: Status of banks and other financial firms in SL (Regarding Solvency)

They invested in SIM's for rental properties among other rental lands throughout SL. Their's wasn't a ponzi scheme. As far as I know they didn't invest in other SL companies. /me crosses fingers

Any bank owner who did not use this change and policy to take the money and run deserves the highest praise. So nice to see ethical and honorable people coming forward here.

SL Investors Bank (SLIB) has been paying up, keeping people informed, has increased withdraw limits, and has (and is) doing everything they can to get their depositors their funds as quickly as possible. I for one have already been paid out 100%.

If SLIB, in any incarnation, survives... I'd do business with them (or, specifically, the owner, Tyrian Camilo) again without hesitation.

I think the most interesting developments will happen a while from now when we see which banks, funds and stock markets actually pay back all of their investors.

From what I have seen, SL Cap Ex/JT Financial has turned off withdraws and shut down their ATMs. SLIB has their ATM back up but a low withdraw limit. I also got a group notice from them asking people to buy stocks from them that are now locked up in the exchanges. I know they invested a lot in other banks and stock markets, so that probably won't end well. Midas bank has been shut down for a while, even before the ban. The WSE is shut down and not allowing withdraws. I have no idea why they wouldn't reopen the exchange and allow withdraws in such a situation, so that is fishy. SL Bank is open and allowing full withdraws. BCX has their ATMs down. 8 Dragons went under, from what a "bank guide" I read said. LL Bank has their ATM shut down. Southern Cross Bank has their ATM shut down with no word.

You’ll notice one interesting trend. The lower the interest rate they paid and the more real world info they gave out, the higher the chances are they are opened and running and allowing withdraws. The higher their interest rate was and the less transparent they were, the more likely they are listed as having their ATMs shut down with no withdraws. And those in between, well, they usually have their ATMs on but with low withdraw limits.

That is what I saw tonight. I'll keep the thread posted on what I see. But again, I think the most interesting time will be a few months from now when we see exactly who paid their investors back and who didn't. That's when we can pat the backs of those who came through and file real world lawsuits against those who don’t! And LL will assist! (as per their blog post)

Incorrect. They posted that Sunday they would have their main branch atm's back up. Well, they lied and got them out on Saturday.

It's a limited daily withdraw, as they are still liquidating land assets. They are also offering a limited paypal withdraw option.

Actually at least a couple of banks (JTF and L&L being too) gave their owners' real life info out publicly so that they would be held accountable and have done nothing but earn people trust. You naysayers who say that all banks are crooked and only idiots invest money in SL should either do your research or keep your opinions to yourself since your doing nothing but panic mongering with no evidence other than a couple of failed banks which has incidentlaly happened in real life (Lincoln Savings and Loan anyone?)

Name me three banks or exchanges that failed and I'll name three that have suceeded and done nothing but been accountable and honest up to this point and even now are honoring every transaction (albeit with withdrawal limits set) and making every effort to give people their money. I'll even give you the first one for your side. Ginko, and for my side I already have L&L and JTF.

I personally don't think all banks are crooked, and my partner used JTF. However, I still think using a bank in SL is idiotic, especially after the Ginko affair. Its adding risk, when there is ALREADY risk that someone is going to take your money directly from you, or that LL will lose it somehow. Add in a second person who could lose it, double the risk. Add even more risk because they might end up to just be some scammer.

It was, in my opinion, a stupid thing to do. Some people aren't hurt by it. Good for them. But alot have been, and more are being hurt by it STILL, because their banks arent going to pay them back.

After this breakdown I think that LL should post clearly what Financial Institutions are allowed to run in-world. I didn't put money on any of them but if I was an investor I surelly like to know what were the banks allowed by the Government.... I for sure would also like to see some more products than a simple deposit with peanuts as interests... I know that the main purpose of SL Banks is to gather money to especulate in land getting high profites, but since we are their L$ providers we should be able to have some more compensations (an utopic though on a utopic life lololol)

Seeing as in many cases the ATM scripts might need to be altered to not accept deposits and still allow withdrawals turning ATMs off temporarily seems like a responsible thing to do and not something that raises a flag.

And as you know the WSE is shut down for an upgrade to version 4.0.

The proportion of failed regulated banks in the US is impossibly small compared to the proportion of failed unregulated banks in Second Life.

Basic Math would argue that the chance that a SL bank would fail therefore is staggeringly high.

If even 1/10th of RL banks in the US failed the ensuing panic would be maddening.

At least the ban comes at a time when land prices are high. Had land prices been low, it would have had a greater impact as banks would not be able to sell land for as much money.

In fact, the timing is interesting considering LL had carefully kept the price of mainland low for many months through the release of sims.

Well, I do a little scripting from time to time. In such a script, turning off withdraws would be very simple. Two lines would have to be removed and one added. It would take me a total of 3 mins. Also, the banks I mentioned with the ATMs down have signs posted that say they have the ATMs down because they don’t have enough liquid funds to cover withdraws. They say that, not me.

I don't know why the WSE would waste its time "upgrading" as their exchange will be banned after the deadline. They offer stocks. People buy stocks because they expect a return. So, they are banned, no matter how many times the owners put the word "fictional" up on their websites. In the real life, they are probably breaking the law anyway and the stock markets have had a lot more "CEOs" run off with IPO funds, thus scamming their investors than there have been banks which have closed. I call BS on the upgrade. I think they got an insider tip that this new policy was going to be enacted and shut down three days before it did. They probably don't have enough to cover withdraws. But that is just speculation.

Guess we will see. It may take a few months but it will be interesting to see which live up to their obligations and which get taken to court.

Sure it only takes a few seconds to change a script. But not all sl bankers are scripters so they have to get someone to do the job for them and you don't know how many ATMs are out there for each bank.



That's your point of view. Personally I don't think so.



Agreed, that's pure speculation.

So, a comparison, just because some people decide to use their hands should we cut off everyone's hands at birth? or just because a gun is used to kill people should we ban guns? I have a million different comparisons for this, the fact is that pretty much anything can be used for good or bad but we to a certain extent have to suck it up and take our own responsiblity for our choices, LL in their divine idiocy thinks they can do a better job telling me how to spend my L$ than I can because some people acted stupidly, tell me that them trying to protect us from ourselves makes sense?

No it isn't.

Don't insult our intelligence.

The only sort of "upgrade" that could have caused a month of downtime would be one which had been contracted out to newbie scripters. It was shut down for some other reason; I suspect foreknowledge of the LL decision, but it could have been something else, certainly. Time to escape with the cash? A hunch that something would happen, and a desire to give some breathing space for a change for that? A fight with the scripters and the activation of a back door?

It absolutely was not an "upgrade" unless the WSE is such an amateur organisation that it's not even worth speaking of.

I have to agree with Ordinal on this one, someone (I think it may have been Sarah Nerd) has already busted the theory that WSE didn't have advanced notice, Luke is cunning like a fox and I'd bet (if it weren't banned) money that he had advanced notice and that's behind the shutdown.

Funny how a little research provides plausible answers. SL Reports cannot vouch for the validity of third-party statements contained or quoted within reposted material, but the full article is well worth a read, and may even implicate LL in some wrongdoing, as the first comment on the story I quoted points out.

BTW, SLCapEx is still promising to honor investment certificates at the stated $L1/share value. There are honest people in the SL Banking industry, even if LL would like to cut everyone off.

SL banks are being removed due to rampant acts of blatant fraud and I"m glad that LL has taken this step. IN the short run people will scream. In the long run we will all be beter off. There will be no more ginko's which I am very thankful for...


p.s. then maybe I can change my forum signature to something else

This is ridiculous.

If half of the people in a society died from gun violence, damn right they would ban guns. Probability matters quite a bit.

Your providing an anecdotal example of a failed savings and loan and then saying that it is the situation of RL banks is the same as SL banking is a totally facetious argument.

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It sounds like LL held off on this situation for quite a while, and gave the SL "banking industry" the benefit of the doubt. To the point that quite a few people lost quite a bit of money. Remember charges that Ginko was a ponzi scheme began in 2005. If they had acted then -- they would have prevented the outright theft of well over $100,000 US.

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One thing that people on your side of the debate like to ignore is the part where LL states that they arrived at their decision after consulting with their lawyers.

Only the ignorant would think they were asking their lawyers if they were allowed to ban SL banking.

Far more likely they were discussing their potential liability AND the possibility that them allowing the banks to continue might be in the gray area of some US/California regulations.

Remember that Ponzi Schemes are illegal. Them knowingly providing a platform for Ponzi Schemes to operate could place them at some risk.

Maybe to LL its not worth the risk to allow some people can play fake banker in their spare time.

I think you will find that LL had two choices

a) get rid of banks

b) introduce some sort of regulation and get rid of people using the word bank etc .. lots of regulation.

We have to remember that the IRS and every other american and many international agencies are peering at LL and looking into what happens within second life


hence bans on gambling.. its not legal.. it needs regulation LL is not a certified regulator. AVS its supposed to be a grid for adults and like no way of enforcing this now they are. Banks and trust companies and investment schemes would require a few things one being that LL take the time to regulate them and enforce rules or eventualy over time possibly get sued themselves. All of this as usual boils down to one thing. The safety and security of Linden Lab as a business and they will always always do what they need to do to keep themselves out of harms way with the authorities. Banks etc run under the "dont do this or i will get sued" category as an individual. For me it would be the same as a person in real life calling himself a brain surgeon and putting up a plaque without a license to do so....... and a hospital accepting him as a certified practioner in that displine even though they know he's not a surgeon or even a doctor .. and then letting themsevles be put in a position of being sued. I think you have to look at all decisions from their end of the thing and it usually has to do with staying afloat and in business and not getting arrested or sued

Isn't that a slippery slope there, Wilhelm? Most municipalities require people to obtain a business license to sell goods. Would you propose SL ban all commerce to protect themselves from vendors who cheat their customers?

Dude, you are really, really, really dumb.

I'm just sayin

Banks in real life are regulated for very good reasons.

As the currency in SL has value, any "banks " in SL should be similarily regulated.

If you have a problem with bank regulation, go protest real life bank regulations...

So everyone can "make their own choices" in real life. Why regulate real life banks, people can make their own choices,

Luke probably didn't have a conversation with anyone from LL, but figured it was going to happen once the subpoena came down. Left unchecked, it would probably be the first of many. It shouldn't take two eyes to see it coming, knowing LL. Even moreso, the possible liability picture probably was not pretty. How many times does there have to be a bank failure before you ban or regulate the activity? It needed to be banned.

Reading the whole article...it's just messed up. Getting belligerent with people who ask for transparency is exactly why I yanked all of my few funds out of Ginko months in advance of the fall. I only had a small amount in there anyway, but when Nick became combative about being asked what was done with the money, I ran. And good riddance. To Ginko, and the others who have proven to be a scam.

I agree whole-heartedly there. I still remember the "press conference" Nicholas called toward the end of Ginko. His refusals to bring transparency or even to answer basic questions left my jaw on the floor.

However, I do agree with Gordon that to punish banks that were well run because of the actions of a few crooks is upsetting. Linden Labs is entering dangerous territory where they must enforce all the RL laws that apply to SL, or none of them. Banking and gambling ordinances today...but what about business licensing, copyright, trademark, and pornography laws? It will make for interesting times indeed.

LL is already required to abide by copyright and pornography laws.

Just like any other web hosting service would be.