SL Banks are Toast - Yee Haw!

Why?

Convenience and also as a presence in 'T3h M3t4v3r53'. Does IBM ring any bells?

IBM aren't a bank. Why would any bank bother with SL?

Currency trading, I would imagine. Although Supply Linden eliminates most opportunities for arbitrage, it does not get rid of all opportunities. Amass a large amount of currency without purchasing it, and start trading on the LindeX. There are a few 'institutional' traders out there; but honestly, I consider it a large waste of time. But mileage, as always, varies.

I'm not sure where you live but if I want to open a bank account I need to show some ID, like a passport and such a feature simply doesn't port to an online world and yes, money laundering is very much what an RL bank would fear being associated with and in this unverified world, that's going to be a problem.

I think that before any bank became interested in the L$, LL would have to become extremely clear about what the L$ IS. Questions like this are fuzzy in my mind:

1. Is it a microcurrency? All the microcurrencies I know of are local, do not cross local jurisdictional lines, and in the US are regulated at the state level.

2. U.S. microcurrencies are traded at a "mutually agreed upon value" between customer and issuer, and thus the basic definition suits LL's usage ... but if a microcurrency is traded internationally, can that pertain?

3. Is it a credit token, not a currency at all? I actually like this definition better, it avoids the entire banking/currency issue. Since L$ can only be spent inworld, they really are a credit. However, is it OK for a credit to have a fluctuating buying power?

If the L$ is a credit, then paying for things inworld in USD is probably a step in the wrong direction.



I can't answer these, I'm not a banking attorney or economist, and I'd wager quite a few Ginko bonds that few on this thread are!

Step back a little from the actuality of the Blog, and remember that Philip Rosedale has visions of SL as the 3D-Internet, or Web 3.0.

Then read this article:



A quote from the article:
"An environment where it is easy and simple to defraud others, with them not having much of a comeback, if any, is not one which is going to lend itself well to significant business development"

I read the article last week and thought that LL would *have* to do something about the SL "banks" or Philip's vision will never come true. I just didn't expect them to do it so quickly...

Under what regulatory agency do you believe Linden Lab would have to file paperwork and registrations for the exchange of L$ and US$?

As I've been saying for awhile, there are a lot of scams out there. That being said it's a shame that trustworthy exchanges like SlCapex/JTF bank are dragged into this since they've been honest and are entirely transparent so they shouldn't have been hit by this dragnet but LL in their general idiocy made it so wide that multi user tip jars are probably against the rules.

My personal opinion is that this is closer to what it is. L are not redeemable for real cash except through LL. What point is there to buying L except to redeem them, ultimately, by selling on the LindeX? Even SLX, which is the most reputable 3rd party currency service, can only cash out on the LindeX. When you follow the money, all roads lead to Linden Lab. Sounds more like a credit to me.

As for whether or not it's okay for a credit to have fluctuating buying power... I don't know. But people trade credits and debt obligations all the time in real life. The laws of supply and demand still apply... I don't see why they shouldn't here, even though we are dealing with a credit from LL.

Sorry to bust your bubble, but Karen Palen (SL Avatar) has enough ID in her name to open a RL bank account!

Regulations of this sort only affect the honest people, the crooks know the loopholes!

I agree that eventually LL might change over to a USD based system.

There is nothing stopping them from charging a service fee for the transactions, so it really might not be as different from LindenX in the end as people think.

As for the sex? hahhaha

no one has ever

ever

ever

ever

ever

ever

ever

had actual sex in Second Life.


Sorry guys I don't care how long you claim it is, you cant manage to cross zip codes.

Theres no reason to keep a hampered L$ around if you set up a USD transaction system into Second Life.

I do not see both existing, it will be either or.

Karen Palen, the SL AV, has a Social Security number and mailing address?

and a Tshirt.

I am glad Linden Labs did something about the bank and similar instutions because too many people that I have known have lost lot of money in them.
Yes we all have personal responsiblity over our actions but sometimes things happen we succomb to peer pressure telling us this bank is safe,etc or other situations that think we are getting a good deal but we end up finding ourselves scammed.
Scams wouldn't exist if people weren't able to win confidence of others to suck them into their schemes.
As far as alternate ways to earn money without using Lindens, I have thought about alternatives to micropayment systems like within current system but it would require
people willing to buy for example yearly, quarterly or monthly subscriptions from their
favorite content designer for unlimited shopping during pre-paid cycles. Yet this would
require certain things like the ablity to process credit, deal with organizations like Paypal where some people wouldn't be eligible to use it because one they would be required to have specific subscription, credit cards, so people like myself who don't have credit or won't use Paypal its difficult.
Also people still can get swindled out of money if someone uses stolen credit cards,etc.
I don't really see SL as good way for most people to have businesses. Yes there
are some that have pulled it off but that is only small percentage of total population.
You're limited by how much you can withdraw unless you're able to increase your sell limit.
We all know how Linden Labs is incredibly slow at doing anything they don't have to do.
Although I am glad they have changed the banking policy too many people were losing money and being scammed.
I do wonder how they are going to deal with different banks in the future or enforce this.

Service and transaction fees.

I think LL was very irresponsible in doing this. The only thing I can give them credit for is at least being courteous enough to provide a window to be prepared, unlike the immediateness of the gambling ban.

Were there fraudulent banks in SL? Of course there were! But there are banks that have an honest track record that are now feeling the pinch because of a panic induced by LL's lack of thinking of the consequences. Where was this policy back when Ginko tanked? Where was this back when others tanked? LL turned a blind eye to it all. Like someone else had said, this only punishes the honest because the crooks use loopholes, or have already cashed and dashed.

I think LL made a terrible mistake with this policy and how they are executing it. As a customer of a well known and trustworthy bank, I wouldn't mind it if LL kept close tabs on banks to prevent fraud, but at the same time, I don't want them ruining honest money making opportunities for banks and customers. Drama caused by Jasper Tizzy, Ginko, Investor Allen and etc shouldn't happen again, but killing the patient to get rid of a handful of parasites is simply stupid.

LL, wake up and stop messing around. Think before you act, and act when action is needed, not just because you finally had time to do so between setting up fancy features and developing crashing clients. LL deserves blame instead of praise. So all that is left to make any money now is content creation, stupid HippiePay junk/spam, and camping. Good going LL, you've just created a virtual world of malls containing rehashed stuff, and a welfare system for those with absolutely no talent.

Honoris Causa...
Silverblade Dagger

I am completely convinced that all of the "trustworthy" SL banks of today would have been the collapsing "Ginko" Ponzis of tomorrow.

How many people thought Ginko was trustworthy for how many years?

Id say most, and for several years.

QFT, Colette. Silverblade, do you remember all the positive press Ginko got, in the months before its sudden demise? It was the largest, most "trustworthy" bank in SL, the standard by which others were judged.

And yet it turned out to be just another Ponzi scheme in the end.

How might you detect such a risk beforehand? I'd suggest you check the interest rates they offer. If your "trustworthy" bank is offering an interest rate that's higher than the annual percentage growth rate of the SL economy, it should be a big red flag to you.

Of course, that point's moot now. But I just thought you might like an objective indicator of your own bank's trustworthiness factor, other than "they've always paid my dividend on time so far".

Your misinformed then, at least 2 of them (JTF and L&L) were transparent, well run and L&L even fought LL successfully to get their money back so I think that it's unreasonable to say that because of Ginko all investments and banks are fraudulent and scams.

Bout time.

I would like to hear if people are having any success withdrawing money from the various banks today...

Also what happens if the WSE does not reopen before the ban takes place?