Can we trust SL banks? PLEASE READ IT

I don't know how long the op has been in sl but you should know better then to trust anyone and I mean anyone. Especially, in sl or in these forums and even more where money is involved. People here will beat you for 100L, many vendors as well as those who profess to be your friends so imagine large sums of cash and with those you don't even know.

How can you give your cash to someone you don't know just because they setup a bank or another site? You can't even trust vendors to give you what you paid for much less these other places.

Yeah, you'll see all the pretty talk about being nice to each other, being helpful but it all goes out the window once cash is involved.

Lesson learned: Trust No One!

I can do better than a prim cube. I will give you 1L$ per 10,000L$ face value!

Stop with the fearmongering, yes SL banks are risky but that doesn't make investing in a bank in SL a bad decision if you do your research. The big difference in investing in SL vs RL is the level of risk, obviously you shouldn't put RL money into an SL bank (duh) but if you have extra SL funds do your homework, check out each bank, if you know people who invest ask them which bank they use, how long they've used it, how much they trust it, why, also talk to the person who runs the bank from my experience most of them are nice people who are more than willing to be open in the interest of being trustworthy... yeah some are slimeballs, some people get ripped off, but I am sick and tired of the bullshit people spew about banks in general just based on a few bad bankers, if your not willing to take the risk then disregard most of what I said and convert your money into USD. Also, only invest what your willing to lose, I quite often take a chunk of my money out of SL banks and convert it to USD and cash it out because I feel safer not risking it in SL.

no.

There are scammers in SL just like there are scammers in RL. At least once a week, there's a story on one of the local news channels about someone who "loaned" a stranger 100,000 out of their personal account after stranger just came to their door with a sob story.

Did you know there are still people sending money to the Nigerian Banking scams?

It isn't fear mongering to not trust someone just on his word. It's being safe.

As far as I am aware, no bank in Second Life is regulated by the banking rules and regulations of any country.

Therefore none are banks.

Furthermore none are actually regulated as investments either.

So what it really is is you handing your money to just some person. Hoping they will pay a good return.

It literally is the online version of someone coming up to you in a mall and going "Hey I have a great deal for you, you give me $20 and next month Ill give you 30$ back. Heres my Phone number. What do you say?"

As long as you'd be cool doing that - then sure, invest in SL "banks".

As I said in my previous post, it's all about risk, you have to do your research and weigh the risks vs the reward potential, if you decide that your willing to take the risk then fine, if you make a good choice like in my opinion I've done so far that's great, you make a little extra money on the side to cash out, if you make bad choices either because you didn't do the research or you did the research and the person still screwed you then I sympathize but it's your choice and you can't expect the collective body to feel sorry for you for your judgement call.

So you recommend investing with people who are not regulated, not insured, and should base your opinion on the word of people who have made the same decision and likely haven't done any research to tell you where the money is going, how it's used, etc.?

Sorry, but it's not fearmongering, it's common sense.

I'm not saying that every banker is a slimeball, but s--- happens, and if the money is gone, chances are, the banker won't be paying people back out of their own pocket.

Society needs to stop catering to the cerebrally challenged.

What research? Available in Second Life and on the official and 3rd party Forums?

A year ago, by these research purposes Ginko could have been a sound SL investment.

The SL banking industry would seem to me to lack a credible system to research.

The only research I can think of would be word of mouth endorsements and being able to look up that the place hasn't folded yet.

Even if they disclose all their "SL assets" theres no real regulated way to verify them.

So what was the face value in the end?

Exactly. LL should just declare them all against the TOS. One way or another that's likely to be the outcome. Either there will be too many bad news stories and LL will act or some government will poke their nose in and cry "money laundering".

Except that the banking ban will be welcomed far more than the gambling ban.

I didn't say it was foolproof however word of mouth is better than nothing, word of mouth like everything else is fallible (except maybe god but I hold the belief that he/she/it doesn't exist so it's a moot point). On the topic of regulation if you do the research you'll see that the legit ones are open to regulation and are trying to form a self regulation albeit at a slow pace and one that in it's current impelentation has it's critics, there's no way outside regulation by a government since SL and it's bankers span from Brazil (Ginko) to Austrailia (WSE) to China (Anshe) to everywhere in between, however if you have a solution to that you'll get the praise and respect of many many people and will have created a better system for all residents.

If you mean the GPD's

The "Face value" of the mass issued bond was always 1L

I have to disagree on this -

If they were real banks they would be subject to the laws of the country where they were established.

-For example-
You would if Ginko were a real bank it would have been subject to the rules of Brazilian banks that have overseas operations and deal in US dollars.

In the United States at least, for any entity to call itself a bank, it has to meet certain
regulations and be subject to government oversight. Those rules apply online, so the
"banks" in SL which call themselves banks are in violation of the banking regulations.

If you are minded to, you can report these fake banks to the appropriate agency for
investigation. And when Linden Labs gets in trouble for "aiding and abetting an
unregulated banking scam" then they might put a stop to it within the game.

The problem with your logic though si that your painting every bank in SL with the same brush based on the singular logic that they are unregulated, I won't disagree with you on that, assuming that we aren't taking about self regulation in SL, however I think it's hardly fair or logical to A) blame them all because of the lack of regulation which they have no control over, and B) expect them to cease to exist because there is no solution to the lack of regulation.

As I said before, if you have a way to effectively regulate financial institutions in SL please by all means mention it.

One major issue with that is that from the moment the L$ is bought to the moment it is cashed out to USD it is not a real currency, that may or may not be true but if it isn't nobody has put it to the legal test yet so it's a hard to dispute claim but working on that assumption for now then the law forcing banking regulations doesn't apply to banks in SL.

A) the fact that the exist in *ignorance* of their countries regulatory agencies is not the same thing as not being subject to regulation.

and

B) the TOS already applies to illegal activity.

Ponzi Schemes are already illegal in most countries, whether they occur online or not.


I'm not a lawyer, I suppose its possible unregulated investment schemes are completely legal. Of course if they aren't, their existence in Second Life doesn't give them some sort of exemption from Real World jurisdictions.

If your suggesting that they be regulated by their respective governments which would be either the U.S. Government (since that's where LL is located) or the country where the banker is located then that would be great but I bet if some SL banker went up to their government and said I want to be licensed to be a banker so I can start a bank solely in Second Life they'd get laughed at and shown the door to security. According to you then it's a lost cause because it's impossible to be regulated to your satisfaction, I don't see how you can hold it against them that there's no way for them to be regulated yet you want them to be regulated.

You still haven't answered my question though about what a better solution is to make them credible if nobody will regulate them and apparently they aren't trusted to regulate themselves, partially because there's no way to enforce self regulation in SL other than peer pressure (which when you can disappear and create a new alt in 5 minutes isn't worth anything).

Ginko had assets up to 750k USD. What government is going to laugh at that? Just because there are micropayments doesn't mean that it would be unsuitable for regulation. The problem is just as it is in Wilhelm's signature - as Nick said, the deal is "you give me some money and I'll do my best to pay you back." That's not good enough. If any one of these banks go under, there is no recourse and the banker isn't going to pay out of his or her own pocket. At least with rl banks, there is some level of insurance. It is stupid to trust someone you don't know from Adam, unlicensed, unregulated, unverified and hand them potentially large sums of cash.

If you want to take that risk, fine. You may get lucky, but as far as I'm concerned, it's a more sophisticated game of Russian Roulette.

They won't laugh because of the amount, anyone could have that much money (in theory). They'll laugh because it's monopoly money until they cash it out at least until a court or legislator says other wise and they won't recognize SL banking as a bank, they'll recognize someone making money by selling a fictional currency and it being their own money for the same reason you mentioned, they're not a bank they're just a person. Unfortunately that causes a chicken and an egg problem, while it's a fictional currency there's no real banking possible even theoretically but when the currency becomes real well there'll be a million other roadblocks in the way.

On the topic of recourse, nobody has tried yet so you can't really say that conclusively, despite all the ranting nobody actually went ahead and sued Ginko for fraud which if nothing else would have at least established whether the L$ is real or not. So that's somewhat of an empty argument.

You're essentially saying that banking is impossible because of these issues but if you are then at least come out and say that without criticizing it with no ways to fix it or at least saying it's impossible. I'm still listening if anyone wants to answer my question as to whether there's any solution to make regulation and accountability possible.

I dunno, banking in SL just mystifies me.

Banks make money by taking in deposits of customers and then LOANING that money back out to other customers with interest. I have yet to see an SL "bank" adequately explain how it is that they are going to generate profit to both pay themselves and pay me interest. If they are going to loan the money out, then to whom? Who is going to check the credit worthiness of the borrower? The utter and total lack of transparency makes it clear that these operations are simply ponzi schemes where somebody is going to be left standing when the music ends.

It makes no logical or financial sense beyond "a fool and his money are soon parted."

It isn't "monopoly money," it is a fiat currency. Don't buy that bullsh-- line. If you buy L and give it to someone else, you have given someone else an opportunity to cash out and get money. This is why the Risk API is in place, with billing and trading limits. If it was just monopoly money, those measures wouldn't need to be in place. Don't believe the doublespeak.

As for recourse... I don't know why people with significant losses haven't sought recourse. I think it is just a matter of time, and it may well be coming. I'm sure Midas Commons is pretty pissed that Luke held out on the money owed to his "bank" by Hope Capital, which amounted to about $20k USD. And I know he's pissed that Luke took what assets he could.

It's a dirty game, and those who play shouldn't be shocked when that seemingly trustworthy bank that's been around for years disappears for one reason or another and then their investment is lost.