Can we trust SL banks? PLEASE READ IT

And yet LL, the only ones who are actually in a position to regulate the banking industry, refuse to do anything beyond give the Risk API and a few other tools, they don't even give enough tools to give a way to verifiable prove in world and L$ assets not to mention actively licensing and regulating banks which would be the smart thing to do but which would make them liable. They admittedly encourage banks it seems but I'm pretty sure the reason they stay away is that they don't want to get sued if one collapses if they've taken the step of going hands on.



Probably is a matter of time, and I wasn't trying to make an excuse out of that, just because nobody's taken action... yet isn't saying that they should have to, unfortunately we won't know many things until someone does.



Again your generalizing, there are perfectly hoonest banks out there and your painting everyone with the same brush, I think even you'd agree it isn't fair to say that all banks in SL are worthless wastes of money (paraphrase but essentially your point) because a few have failed in the past and some will fail in the future, definign failure to include fraud and theft btw.

Yes, and LL is wrong for not banning or regulating this industry. I don't think they encourage banks actively, but their hands off policy certainly emboldens those that choose to start up one of these ventures.


There are perfectly honest banks... are you a telepath? Can you read minds? No? Oh wait, are you a soothsayer? Can you see the future? Even the most well intentioned of places - and I believe Midas was well-intentioned - goes belly up. And leaves people without thousands of REAL dollars. I am not saying they are all scum. I am saying that no one knows what will happen, and no banker is going to pay back thousands (or hundreds of thousands) of rl cash to replace the lost L.

There's a local car tire dealer who gives out free bumper stickers that say:

"ACCEPT RESPONSIBILITY FOR YOUR ACTIONS"

I love it.

If you can get one and scan it send me the texture and I'll deal with turning it into a texture and start handing out SL bumper stickers for free telling people to accept responsibility.

LOL why bother scanning and turning it into a texture? It's just white letters in Arial font on a dark blue background.

Too noisy, people think too much, I'd have to run from congress or something to get away from places where people actually think.


Would definitely make it easier to get a date.



So your essentially advocating that they ban any place that bills itself as a bank, a stock exchange or other similar service? Despite the issues there is some good economic growth coming from all of this, company startups because of IPO funds that end up turning into fully fledged good companies for example.

In a nutshell, yes.

I feel that I am trustworthy and could handle other people's money, but I don't trust other people to do the same. You can't check your common sense at the login screen. But if it's a risk you are willing to take... that is your business, until the business is banned. I just don't want to hear about it if things go wrong.

Ironic considering the topic of the thread and the original post.

Why would you put your money in a sl "bank" anyway? Let's see...fear of losing it if you hold on to it? Or maybe, fear of having someone break into your home and finding it?

I don't know if you can gather interest but even if you could the amount of risk of losing your money far outweighs whatever interest you'll get.

Not trying to be sarcastic but really, why would you put your cash in a place like this or any other similar place? Most important thing is you don't know these people who you're giving your cash to and even if you did, what guarantee is there you won't lose it? There is none.

I had similar thought in June last year about Ginko.
Everyone was telling me for month how it was good deal I should use it, I would be able to save money, gain interest, etc.
Then I started to think about the way SL transfers cash and the security issue they had before this account was made.
And I thought how can this bank keep my money any safer, then keeping it my account?
And its not like I have whole lot.
If someone really wanted to steal it make more sense to know who has the most money and best credit and steal that.....but then they get into trouble with Linden Labs.
But if they opened up business, called themselves a bank or investment company and put up things that looked like ATMs somebody would think cool I should use this, I will put money here. When they get enough money they could just run off like they did in Ginko.
They know LL won't get involve heck if they were smart they even pay some Linden off to protect them if they were smart.
It make more sense and it's probably happen now or will be soon by new business but can't. won't say who but I can see it becoming new scam preying on anyone stupid enough to give credit card information...heck it would smarter then just dealing with the Lindens just go straight to credit card info, cut out the middle man.
It happens all time with phone companies workers sell information so others can use certain services for free like cell phone service. Phone hog is example of one of those services.
It is possible. The whole entire SL often seems like one way to nickle dime anyone who will open their pocket book and see how much they spend, eventually those who spend the most will just get fed up with the bs.
I could say hey for fee my bank of FD Spark's ALt will hold your money for such and such period of time and pay you back but what happens if I put my hand in the cookie jar and tell my clients well I can't pay you today you I made some bad investments so you gotta wait until the first when my pay check comes in.
Tne real issue is who would want to pay for me to hold their money who doesn't have some marbles loose?

As the archives will show though at the same time many people were letting everyone know on the forums and elsewhere that Ginko was a ponzi scheme and a scam which it ended up turning out to be.

please read it-------> No.

Any company that ask you for your credit card or virtual money promises things and there is no way to verify if they are trustworthy or their is some system that guarantees you will be protected don't give it too them.

In this thread, many people are making similar warnings about the whole banking industry. And they just might be correct again.

Responding to earlier posts: I think over the months since Ginko's collapse I've changed my stance on regulating or banning "banks." I agree: I don't really want Linden resources spent on effecting such regulation or enforcing such a ban, but that's not what's changed my views. Rather, it's that *everything* is unregulated, so it may be even more misleading to new residents if "banks" were in fact valid financial institutions, when all other financial transactions can be pure theft without recourse. For example, if a new resident could trust a "bank" he might be more vulnerable to being "taken" by a fraudulent Estate land sale.

So now I think it's incumbent on experienced residents to do everything they can to warn newcomers of the risks. Maybe some official Linden warning would be appropriate, too, though I'm not sure where or when that would be effective.

What will happen (and it is sure 100%... well not but more sure that "your" invested capital into SL "banks" ) has been posted into the second message by Victoria.
When someone with enough time and money, mostly because of "principle", will sue in real life a resident because of the bank-scam number #4726253; and when RL papers will start with their effect title like: "Second Life used to finance the terrorism via virtual banks frauds", finally Linden Labs will be forced to wakeup and the banks will disappear instantly, exactly like the gambling, or they will be regulated and owned directlyby Linden with a real life credit institute involved (another way to get money from residents).
A good opportunity has been offered with the recent ginko affair: big enough, great echo, a lot of ppl loosing their money, it was the perfect candidate to transfer everything to the real life... but there was no Mr.Br**g avaible at that time, so we just have to wait.
As Philip said: "we try to not put rules where they aren't really needed", read: "we do not place rules, until we're forced to do".
Get your pop-corn bag and watch the show!

I suspect the honest reason is this:

The Lindens can't sue the scammers, because they aren't the ones being harmed.

The Lindens can't act by banning because if they did, the scam "banks" would just shift blame onto them. "Sorry, the Lindens are closing us down, all the money has been confiscated, so you can't have yours back." Then, a bank customer could easily sue Linden Labs, since unlike the bank scammer, their name and address are easily available.

Answer:

Ban them.


-------------------------------------

I can even write the copy for the Lindens:

Unfortunately Linden Labs can no longer allow the use of the Linden Dollar in any Investment systems or "Banks" in Second Life.

Our micro-payment system, the Linden; is not an actual currency and was never intended to be considered such.

To that end we simply can not allow it to be used in the gray area of internet banking and investments due to possible unforeseen conflicts with jurisdiction and regulation.

-------------------------------------

Basically -

The Lindens cant tell whats a Ponzi and whats not a Ponzi either

As soon as the risk of potential litigation or simple bad press about fraud in Second Life outweighs the benefit of the current buyer-beware investment system, "Banking" in SL will be banned.

Only if Linden Labs actually confiscates the money with the ban.

Because basically all this "Banking" in second life is totally unsecured unregulated private loans.

and as far as Linden Labs is concerned its just Gifts given to the banker.



When they banned casinos they didn't confiscate the money.

Any bank that didn't divide its assets among its depositors/investors upon a ban likely was the type that was going to fail and bail regardless.

Linden Labs would have to confiscate the money with the ban, otherwise they'd actually facilitate the scam. If LL had a policy of banning banks but not confiscating the money, then - since it would still take a few days or weeks for the Lindens to ban a "bank" - any scammer could start a "bank" knowing that it would eventually be closed down and they would get to keep any money paid in, and if any bank customer complained the scammer could pass the blame onto the Lindens.

I don't think banking or investing should be banned at all. Many other virtual worlds are coming online and embracing virtual finance and "banking". Entropia is just one example. Without finance or investing, the economy grows much slower. And then, where would the limit be? Would it then be bannable to "lend" money to a friend in world?

There are many investment schemes in the real world which are just as risky if not more so than the ones found here in SL. We have Hedge Funds which are funds even in the US and EU which have litteraly no regulation. There are other investment schemes in developing countries which have no oversite.

The simple answer, as with anything in SL, is to not give your money to anyone you don't 100% trust. Find out their real world info, and if they are unwilling to give that info, ask yourself, why? There are WAY more scams in SL and other virtual worlds via "money stealing scripts", straight up estate scams, land rental scams, items sale scams, etc. than there are from virtual finance. If anything, kill the LAND BOTS first. If you hand your money over to someone and they take it, that is your own fault. I learned that 15 years ago when I played Ultima Online for Christ sakes.

I think you are over-thinking this.

Legally I will guarantee that LL policy is there is no such thing as a Bank or an Investment house in Second Life.

Thus they could ban them without confiscating anything.

They would be basically banning something that doesn't really exist.

Just like Gambling wasn't "real" gambling (remember?)

And Ageplay wasn't real ageplay

They could simply do away with the Linden and use US dollars.

Advocated on many occasions in years past.

That would solve the banking/investment problem entirely. Since any smokescreen of Lindens being "monopoly money" would disappear.

I think what he is saying is this:
If LL came out tomorrow and said virtual finance is now "banned" all the banks would go under and everyone would lose everything. Thus, by banning the banks and investment firms, they (Linden Labs) would be causing them all to fail. If the bank owners were all banned tomorrow then, (especially the ones who say they invest the deposits in real life), would be happy as all the money would stay with them out of world and they wouldn't have to pay it back as they had been banned. Then all they would have to tell people is: "Well, LL banned me, an so the L$ are gone. Sorry folks."

That would be silly. Why would LL want to get rid of the L$? The L$ machine is one of their largest revenue generators via the LindeX and currency creation. Without the L$, LL would have gone under long ago.

I'm not so sure. Thats a lot of conjecture.

I also don't have the figures for how much money they make off the LindenX in real dollars. They could of course continue to charge transactions fees between players even without the Linden $.

It would however shift the problems of fraud away from Linden Labs and move it to the general systems already covering the 2D internet.