Financial Regulation in SL - STOP THE BANK FRAUD!!

That is what I do from time to time... get a bunch of Lindens together and then sell them and put the real money into a real bank. I have always been able to make more money than I spend in SecondLife. Plus cash out from time to time.

Mike

Our group did business direct with Jasper over the past 3-4 months. We put in place detailed contracts and T&C, all 'signed' and legit. All of our work was paid for in full within the time constriants stated in the contracts. Never was a payment missed or left unaddressed. IM's were replied to almost 100% of the time, with positive results.

None of our groups invested money into any organisation as shareholders or otherwise. Nor are we linked in any way to the various ventures carried out by Jasper.

I always found him to be professional and had the apperance of being a honest, hard working guy. This IS an opinion based on our business dealings direct with Jasper. I consider myself to have a 'good business nose' and can often 'sense' if something doesn't feel right. I can honestly say, I never had a bad sense about Jasper as a person, or as a business man.

I sincerely hope that all those effected by the fall of the organisations reported, recover at least some of their losses, if not all. I cannot help feeling that, 'investment' always carries risk, many shout from the rooftops when their investments are climbing, but use the term 'scam' when they do not. Personally, we much each define what the meaning of the word 'risk' is to us.

From the megre perspective that we as a group had, I could see what appeared to be an outline of the business plan that Jasper utilised. I would place a heading of 'High Risk' to that model, as it simply relies very heavily on market trends linked to buying/renting/investing to give the sort of return projected. Should one or more of the elements involved, not follow the projected trend, that can alter the whole map of revenues. A very complicated and detailed set equations must have been used as the expance of revenue links grew, perhaps beyond a point of implosion.

I can only speak, from the perspective of our own dealings with Jasper, but cannot align with what I have read in the various posts. Just MHO.

Has anybody actually tried

the local police?
the San Francisco Police?
the local District Attourney?
Small claims court?
Judge Judy?

I believe that the laws local to the two parties, and the laws that apply to Linden Lab (California, US, etc) all would apply.

Don't expect LL to enforce laws, that's not their job. They just have to obey them like everyone else.

Lee --

I don't necessarily agree with you. Creating and enforcing laws within the gameworld could be Linden Lab's job if they chose to do it. If Linden Labs took on this respsonibility, I think that many problems would go away and the ingame experiece of avatars would improve and become safer and more predictable. This is exactly what many folks are clamoring for.

That said, I don't think it will happen. Linden Labs shows next to no interest in taking on this role.

That said, it is true that we could turn to real life laws and real life courts to sort out our disputes. However, as a lawyer, I know that that would be extremely expensive. While I would be happy to take on a case to sort out a SL transaction gone bad in a RL court at my RL billable rate ($185/hour) -- most SL transactions, even the large ones, would not justify that expense. Add that to the fact that RL courts would be completely unfamiliar with online environments in general, and with SL in particular -- which would increase the cost of any such case significantly because a substantial amount of attorney time (at the billable rate) would be spent educating the court about online worlds and SL.

It would be even more useless to go to RL police. RL police would start by laughing at the idea of an online loss. If they stopped laughing, they would say -- "That is a civil matter, talk to an attorney." If you quibble -- noting that it is a theft as well as a breach of contract -- they would probably say that they don't have jurisdiction over a virtual transaction unless it has some RL component (such as a physical good actually present in their jurisdiction).

For these reasons, we need ingame solutions. If Linden Labs will not provide those solutions, we need to do so ourselve.

Beathan Vale

Bethan,
You may have unintentionally hit on the next big thing in LL - virtual courts and virtual lawyers! Now that would be a shift in thinking for SL if LL devolved the responsibility for imposing suspensions/exclusions to the residents... Linden appointed "judges" with a randomly selected jury of residents and the power to impose appropriate sanctions would certainly add a new dimension to the game - not to mention the in-world money to be made in legal services!!

Now someone is going to tell me that there's already a Supreme Court sim or Old Bailey island...

Why shouldnt I give money to a bank in a virtual world? Of course, I am aware about the risk! And I take the risk. But if such a shit happens, it is also my right to ask for justness.

LL tries to make a virtual world and they say, that money can be transfered from real world to SL vice versa. So they also should be after it, that money is safe in SL. Otherwise all this "business" and "statistic" stuff is just fucking piss take.

I think most of the people in SL try to use this world for fun or for business - but I think, we all take SL as real as a virtual world can be. But LL should really look for more fairness in this world, as long as they make the rules on their own!

I hope, that this thread will grow much bigger, so that LL gets a picture of how many people are involved.

People, I tell you: Beeing in SL for many months, trying to get some money for the future in SL for building up some business and then loosing everything just without any reaction from LL - THAT SUCKS!!!!

the matter is not that LL should fix just the problem: It is not only a game, if LL allows someone to change maybe 22 million L$ into US$. That has to do with real life, and so the rules from real life should be put on such a guy. It is not only a mistake or just gambling. Do you think, only because it is a virtual world, none of those usual "real-world" structures should be used?

Sorry for my bad english - I cant say good enough, what I want to say... I'm not really angry about loosing some money - it was money, earned in SL - and for me it is gone in SL. Its ok - in RL I lost nothing. But it makes me angry, that another guy took that virtual money perhabs into real world and can have a nice life with it now!

Perhaps you missed the part about there being NO banks in SL?

You are giving your money to some stranger (or MAYBE a friend or acquaintance or even a family member... but still). As far as Linden Lab is concerned, it is just that, a gift. All monetary exchanges in LL are just that, too; gifts. Whether you get something in return for it or not is COMPLETELY OUTSIDE LL's concern. If they promise you the Brooklyn bridge in return for all your L$, and you GIVE them all your L$, it is STILL a gift. NO "trades" (immediate or delayed) are guaranteed by LL. Period.

The way you mitigate the risk of losing out in a "trade" is by dealing with reputable people/"companies". When you get screwed over, the issue isn't with LL, but with the person(s) who screwed you over. Yelling at LL is pointless, unless somehow LL is involved, such as due to an exploit.

When it comes to "banks", there are none in SL. Even a RL bank doing business in SL has no obligation to honor its promises within SL. For a bank to exist in SL, there must be bank regulations put in place and enforced by LL. I can understand where LL wants to keep itself far away from that barrel of worms.

That is the risk, that I take. I am aware of it. The problem is, that someone had a contract with me and is now not willing to fullfill it. And I can just do nothing about it. I cant get hold of him - only LL could!

It looks then that LL doesnt guarantee anything. And that is the point: One of the main matters of SL is trading. People buying things in stores, buying land, building things on it, having fun for some L$. And nobody but LL itself can do something about the relationship between every two contractual partners.

Otherwise nobody in SL can ever be suer, that he gets, what he paid for. There's no difference between a selling machine or a bank. Both get money and should do something for that. And I think LL should improve the structure, that fraud can be traced!

Justice in the real world is rare enough. Justice in Linden world doesn't exist at all.

You are correct that this does not foster trust and very likely hurts Linden Lab's stated goal for increasing their reach. Their customers have been telling them so for years; the history of the real world gives them thousands of lessons to learn from. Linden Lab thinks that people will behave differently in a virtual world despite the whole history of humankind telling them otherwise.

They are foolish in this matter. It is unfortunate.

You would be better off taking that money and sticking it in the RL stock market or a real savings account. You can also convert your L$ into a USD balance. It will not draw interest but atleast you know unless LL goes under it is relativly safe.

And yes it is a VIRTUAL world. Not a REAL world.

Sadly, the reality is that LL are never going to look at any sort of financial regulation - simply because they are not good at it themselves!!

Those of you in the EU like myself will have been notified that LL is now going to add between 15% and 25% Value Added Tax (VAT) to all cross-world transactions, such as tier payments, account registrations etc. Therefore, if you are in the UK for example, you will be paying 17.5% more than the US for Tier. So what? you may ask - LL are just acting within the law - well unfortunately, the fact that they are applying it now does not make up for the fact that they should have been applying it on DAY ONE. Since tax is a personal liability, LL are now potentially liable for VAT going back over a year and since they haven't collected any, they are looking at a potentially huge bill from the EU!!

Now, we all know where that is going to come from don't we... which is why as of today, I have cancelled my payment info and have left SL. What they can't make back from the EU residents (I'm sure they will try), they will get from increased Tiers and registration prices for everyone - sorry rest-of-world, that sucks I know.

Maybe Jasper Tizzy saw this one coming and THAT'S why he bailed.......

There are no "banks" in Second Life. For that matter, there are no "stocks" in Second Life "corporations" on "stock exchanges". They are all simply investment funds for individual avatars.

So when you put lindens into "banks" or "stock exchanges", it should be considered nothing more than a gamble in a game. So if you find it enjoyable to hand over some lindens to another resident, go ahead and play! I don't see anything inherently wrong about this, either. Just know what you are actually doing when you deal with "banks" and "stock exchanges".

No "financial regulation" in Second Life, please. There are enough new regulations, rules, and taxes at this point. Keep that for real life.

PS - Be careful of self-proclaimed "RL financial experts". AllenInvest and Jasper Tizzy both for one heavily touted this as a selling point. There are other similar episodes coming soon. Just ask yourself, if someone is an expert in RL, why are they putting so much energy into chasing little bits of money in SL?

Anyone for a game of Monoply?

Maybe if you thought like the Nah-ha kid you'd still have your lindens intact....hmmm...interesting thought

Monopoly is a fun game at first. Everyone has a stack of colorful monopoly money and plenty of opportunity to buy land, railroads, and utility companies. At the end though it becomes a big mess of mortgaged hotels and sleazy deals and most people are unhappy.

I'm starting a Monopoly Bank. I'm offering 5% a turn interest.

Stop the Bank Fraud?

That's easy. Just don't put money into something unregulated and with no way to know who is running the operation.

Unfortunately that would also require people to think before they act so I don't have much hope.

I like the way nature balances things out - like for every person who makes a mistake there's always some grinning "expert" ready and waiting to put them straight...

Misanthrop-Os, they aren't just for breakfast anymore.

You know, it always boggled my mind how irresponsible, childish, naive, and willfully blind people can be.

Come on people! All of you have to have SOME common sense! No matter what bank / company / stockmarket you're 'investing' in, what you are doing is handing cash over to an individual avatar's account. There are no usinesses or corporations or things of the sort in Secondlife. So you're giving your lindens to another indivual and trusting THEM to do what they say they are going to do with it.

Okay, fair enough. You're doing the same thing whenever you buy merchandise from a vending machine. Trusting the creator to give you what you paid for. And likely basing your trust on that person's reputation and appearance to some extent.

The problem is people get GREEDY. Mind you, I have no problem with greed. It makes the world go round. I'm sitting in a chair built by greed, while typing on a computer built by greed, using a program built by greed. Because all those greedy people wanted to get PAID for making these things for me. A bit of greed is fine, as long as you don't let it blind you.

So, somebody offers you an AMAZING deal! Incredible! Astounding! Too good to be true! 1,000% interest a month! 10,000% after six months! Amazing! Much better than anything you'd find in RL! It sounds too good to be true!

And guess what? It probably IS! SL Isn't some mystical magical land where market forces go on haitus for your convinience. If 1,000% interest seems unlikely in the real world, guess what? It's unlikely in secondlife as well.

Now, there are two types of people who fall for schemes like this: The ignorant and the stupid. If you were ignorant, well, my condolances. I hope you didn't lose much, and I hope what you DID lose was a reasonable price to pay for the lesson you have just learned. Congratulations! You are (hopefully) no longer ignorant! That gives you a leg up on the stupid people in the future.

The stupid people are the ones who DID know better, were suspicious, and still allowed their greed to overcome their common sense. They're "aware of the risk" but now they want "justice." Um, sorry, but that's not quite how the world works. You TOOK A RISK. When you take a risk, sometimes you win, and sometimes you LOSE! You were not forced to take that risk. You decided to take it all by yourself. If the risk had paid off, you wouldn't be calling for more regulations by the government and Linden Labs to limit things and prevent you from making stupid decisions in the future.

I agree that some regulation would make the system run smoother and more reliably. I also realize that more regulation would make everything more expensive and complicated with linden labs or RL lawyers looking over everyone's shoulders and at every transaction. Rather than looking for a higher authority to stop you (and everyone else) from doing foolish things, perhaps you should focus on your OWN behavior.

Incidentally, I belong to the THIRD type of people... I had a few thousand lindens in Ginko (a few hundred in ginko junk bonds now) and I currently have a few thousand lindens in the WSE. I knew/know the risks of both, and I accept them because I'm on them for FUN. I didn't cry when my ginko account went belly up, because I expected that to happen at some point, and was interested in seeing what would happen. And I won't cry if/when the WSE disintegrates either. And that's because I make sure that the amount of money I have in it is not more than I'm willing to spend for the entertainment of watching my 'stocks' go up and down.

If you're trying to make REAL money on such things in SL, well, that's YOUR decision. Just don't complain if it turns against you and try to take away MY ability to make the same decisions.

Comon sense is what usually follows.. it is perhaps otherwise known as Hindsight. A great gift most of us do not posess.

I don't agree with labelling people into 2 camps.. Stupid or Ignorant... Hands up anyone who have NEVER done something stupid <tries to count those that didn't put up their hand in amongst the sea of raised hands>.. The all Wise are usually those with a death rattle.

I never claimed that I haven't done anything foolish. Everyone does. Then most of us learn NOT to do that particular foolish thing. At first you don't know any better. you're ignorant. You get burned. You learn. you move on and don't repeat the mistake.

OR.. you're Stupid. You get burned. You complain. You go back and do it again, even though you should know better.

For bonus points, complain, ADMIT you'll likely do it again, and then demand that others step in to stop you! ;>

On that basis alone, our children will never make the same mistakes that we did.. or our forebearers... there should have never been a WWII, the evolution of man, given the time we have been around, should have reach a pinical of enlightnment.
Every new generation will always start at point one, none posess the 'enlightment' we have gainned, if we pass down so easily the past knowledge of our own mistakes, why is the world such a screwed up and complicated place?
The whole thing is answered in one short sentence. We are all Human.

I just found your post condescending and stating the obvious AFTER the event. Personally I never delved into any of these situations for my OWN reasons. If others make that decision, win or loose, that's their choice. Afterall, should everyone have come out of this smelling of roses, would the call of Sooth Sayer be levied, if I were to say anyone doing so would be either Stupid or Ignorant beforehand? Oh, and another thing Humans don't like is to be told 'I told you so'.

okay, had to pick this up again after todays financial report by GPB has been released. Some of you will remember our "beloved" ginko CEO who's only words been all the time "has been invested" on any questions regarding customers money being turned into worthless stocks. Every time someone asked "what did you do with the money" his answer simply was "invested".



Okay, now I wonder how he can then have 0 revenue, 200k expences with owning 130.000sqm of land. Where is the "invested" money than and why does it not make any revenue and what does ginko still own land for?

This is all just a load of crap (and dont get me wrong I never had any money in ginko at all or lost any).

In my opinion SL needs a regulation authority as you would have on the real stocl market and a authority where this services have to deposit securities for the business they run. Then, when the shit hits the bag this authority must have the power to freeze the company assets and, if required, sell thier assest to secure the cash. Yeah, there is LL, but they are not up to such a taks. Best thing would be to get a RL insurance company to jump on this with a large budget.

Anyway, talkingf about scams, just the last days I come over merchzants again that list items on onrez.com. entire vaatar packs woth really nice skins, shape, clothes pack, accessoires etc... Only that this packs dont contain nothing but a cheap ass shape.

Now the nice thing is any AR's filed with LL wont bring any results and leaving negative feedback on the ALL the merchants items either, cause the merchant jsut rmoves all listings and lists them again. No refunds, no packs send. And if you file a ticket with onrez it takes them so long to look into what you wrote that by then the person in Q already listed the same shit again under a new name, different pics.

And to be honest, I'm sick off all this scams, rip-offs, copy cats and thiefs.