It's time for SL residents to take a stand

well although i dont like witch hunts and this thread should not have been started its picking up steam lol

I dipped my big toe in the ginko pool awhile back with a whopping 1k deposit which did not return the high interest rate and removed myself from the ginko bank a few months back when I decidd my experiment had failed. At the time i stuck my "test money" in to see what would happen with it (i like pushing buttons i press all the buttons on all the contraptions in this game to see what will happen over time). At the time of my deposite ginko had actually kicked a lot of people off of a sim where they were renting/owning land. They lost their money and their virtual homes and had to take the loss. This was when I was relatively new and i went searching for this strange ginko machine to see what it did.

I think the actualy ginko clients right now are to busy trying to figure out what to do and several seem to have sought some legal advice and gone to their local authorities. Time will tell but anyone who places more then they can afford to comfortably loose in these strange second life experiments has a lot of potential headaches coming to them unfortunately .. such is life

Oh, enough already with the crypto-Anarchist agenda! It can't be that difficult to understand that one might well have an interest in products and services that don't exist while the ones that do are so badly flawed--in this case, by lack of accountability to any trusted authority.

That said, Ginko's is probably such a lost cause that liquidating and divvying up whatever assets remain would be the least dreadful among the options at this point. And, under the circumstances--no oversight or accountability whatsoever--there's no reason to believe any statement of assets anyway, beyond whatever trust one chooses to hold in the "bank's" owner. That is, a bankruptcy without a credible receiver is only as believable to the extent of one's faith in the bankrupt party.

And a fraud charge just seems implausible. By the very unregulated nature of in-world enterprises, what accounting standard would even apply? And even if some mechanism were viable, I'm afraid it's unlikely to have much better results for the depositors than whatever the owner does voluntarily--a recourse without a remedy, I think.

Looking forward from this debacle, perhaps some enterprising successor can establish an in-world financial institution with audited transparency and serve a worthwhile need in the economy. But unless some "central bank"-equivalent is willing to provide deposit insurance, it'll never be a "bank" in the modern sense. As we see, the "full faith and credit" of this owner--or any other well-meaning individual--can't weather a run on the "bank" even were the assets to be managed with fiduciary prudence.

No no. Witch hunts are a personal interest of mine, and I can tell you that this is not a witch hunt.

I think I see your problem, you trust "authority". Never a good thing to do.

Ok, so maybe i shouldnt have started this thread.

BUt this does have huge effect on secondlife whether you like it or not.

If this turns out to be a ponzi, which looks more and more likely if you read nicholas's posts can you imagine the negative press secondlife will receive.

A few people getting upset about age playing is one thing, but one player making the run with over half a million US dollars is a whole different ball game. Do you new players will come flocking when one of our residents is shown to have ripped off a whole lot of other residents in a major way?

Also, consider the fact that the classifieds page on the secondlife website which shows the top ads use to often contain the ginko ad. Now im not sure how many people use that but what about all the new visitors who dont know any better?they have just signed up and now they find an ad for a supposed bank on the first page of classifieds offering huge interest.
Most of all, its a very bad look for linden labs which is what im concerned about.

And if you think withchunts are bad, id have to disagree, it bought him to the forums didnt it?
and now he has made himself look even more guilty.

any mention of an av making off with a million dollars is sure to increase signups (they want their slice of the pie). and any publicity is better than the tired old perv publicity.

Because they were supposedly getting a good return on the 'investments' they were making.

The fact that everything in SL is unregulated (how many posts have we seen here about casinos not paying out?) and that any high-return deal is almost always also a high-risk deal doesn't seem to matter.

I do kinda feel bad for the few that didn't realize that SL isn't RL and that they really have no protection against things like this happening. Hopefully, they will learn from this and do more homework before putting cash they care about into the next big thing.

edit: not in any way saying that people were scammed by ginko - dunno anything about that either way.

Yeah, well, I kinda thought that was the whole point of that "consent of the governed" scheme. Or maybe Jefferson was just too right-wing for this crowd. We imbue in institutions certain responsibilities for which we hold them accountable (by vote, armed insurrection, whatever).

It ain't for nothing that the RL market makes a distinction among notes printed by the central bank, corporate paper, and counterfeit currency. At the moment, there's no valid way to distinguish among these in SL--to reliably ascribe any particular risk profile to any in-world investment. I just happen to think that it would be a nice feature of the SL economy--a possible spur to growth, in fact--if there were some basis for making such distinctions.

I assumed that their primary motivation was to accrue interest, but the fact that everything in SL is unregulated should've made them think twice.

Scam or not, it doesn't matter. There is no insurance in place to protect bank customers. Even in RL when a bank gets into trouble, it causes serious hardship for those with money there. Even with all the government regs and insurances.

Why bring this possibility onto one self in a fantasy world where the currency is pennies on the dollar?

Just doesn't seem like a good plan.

Guess that about sizes this thread up!

You can buy and sell chicken manure for real cash as well, doesn't make it a token currency.

Monopoly money has more reality than $L .. it's made of real paper.

Yes, and if one doesn't deliver the RL chicken manure that was paid for by RL cash, one goes to RL jail. So, the point was what, exactly?

What did you think it was going to turn out to be? I feel for those who might lose substantial sums of L$ if Ginko goes belly up, but my sympathy only goes so far, because I also feel that anyone who put their money in an unregulated bank is compicit in whatever it turns out to be.

I think it probably is a ponzi scheme, but from reading the owners comments my gut reaction is that it was started with good intentions by someone who got themselves in way over their head. There's no way on Earth that the kind of returns he was promising, and even delivering for a good long while, were sustainable. If he manages to pull this thing out of the hole then some financial services company should immediately hire him for a huge salary, because he'd have to be ten times smarter than actual professional investors and bankers. What are the odds that he is? They're no different than they were a year ago. Incredibly slim.

It all boils down to Section 5.1 of the Terms of Service. The Lindens don't get involved in disputes between residents. The Lindens don't enforce contracts.

The Busy Body Committee has major problems with Section 5.1 as it interferes with their efforts to "beautify" Second Life and make it "safer." Typically, this involves things like proposing reasons for seizing the land of other residents, disapproving of how other residents make their money, and even posting manifestos about how someone somewhere has to do something about the horrible horrible whatever RIGHT NOW. Anyone who disagrees with the Busy Body Committee is "unsympathetic" and "has failed to see the big picture."

For example, this particular thread
/327/93/201633/1.html
proposes taking a resident's enterprise and handing it over to another resident. See how seizing the business made everything better? I didn't either.

Basically, the best possible thing to do would be to let the enterprise owner figure it out and apply their own solution but that gets in the way of the BBC and their merry task of knocking the spinning plates out of someone else's hands.

I agree and so far he is doing everything possible to save the bank. He has all but eliminated the interest payment as well as any withdrawls so given time even a modest return on investment will generate some cash reserves. He does hold 9 million shares in HCL along with other stocks that I'm not sure of and any dividends from those investments will increase his equity. Currently the webpage lists deposits of about L$190,000,000 so if he has up to L$150,000,000 left he still has considerable investing power. In all the local Ponzi schemes that I saw the regulators seized all the assets and turned them over to recievers who immediately liquidated them getting pennies on the dollar as well as huge fees for their services so the investors got very little in the end.

The question is will the regulators (LL) seize his account and turn it over to recievers (?) for liquidation?

http://www.secondlifeinsider.com/2007/08/03/multiverse-1-0/

Put your money where your mouth is, folks! I know I will be!!

It's highly unlikely the Lindens would get involved due to Section 5.1 of the Terms of Service. Plus, to the best of anyone's knowledge, Ginko is not insolvent. It simply changed to a maximum daily withdrawal limit. Even in the event of insolvency the risk ("you might lose your money" was most likely spelled out in advance.

The present situation is "slow pay" rather than "no pay." No amount of foot-stamping, breath-holding, or hair-pulling will speed up withdrawals.

I'm frequently shocked that residents act oh-so-grown-up on the way into a transaction and then scream "Mommy Linden Mommy Linden make it all better again!" when there's a negative outcome.

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.

When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.

When they came for me,
there was no one left to speak out.

Well unless they manage to convince law enforcement somehow that it is a likely Ponzi and that law enforcement decides to actually investigate.

AT that Point the portions of the TOS that apply to illegal activity might likely superscede the part you are talking about.

Point is .. if you directly gave Ginko RL money, say through paypal, credit card, etc, you'd have a legal case. You gave a real person, pretending to be an investment company/bank, real money.

If you deposited $L to the in-world "bank", whether or not you bought the $L with RL money, you're SOL. You were just paying a game with play money.

It doesn't matter if, in a pretend virtual world, while playing a pretend virtual game, someone playing a pretend virtual investment company stole your pretend virtual money while you were playing at being a pretend virtual investor ... Allegedly ( gotta stay clear of libel heheh )

That's why Monopoly money is more real ... you can go to the cops and say "He stole my paper"

The ToS is a legal document for LL's protection. It's not a statement of optimal utility for SL. So as it stands now, investments in SL have no legal status at all. And that's perfectly fine for an entertainment, a "game" in which any old random rules (like the ToS) just make up the gameboard. For a virtual economy that aspires to attracting substantial RL investment, though, it's a significant barrier. For that reason, if LL could delegate authority to resolve business disputes without incurring liability, you can be sure the ToS would be amended overnight.

In this case, nobody but the juggler--and I'm not so sure about him--knows which if any plates are still spinning. I rather suspect it's too late for anybody to try to catch in mid-air anything of much value. Maybe somebody else could help sweep up and distribute the jagged pieces, or maybe not. But I agree that there's really not a lot to be gained by shooting the juggler. Especially if there's no mechanism available for future jugglers to do much better.

Completely overused, inappropriate and out-of-context famous quotes FTW!!!

Would that be the illegal activity that no one has managed to prove at this point?

All I see is a resident-run enterprise which is having a problem with allowing residents to withdraw more than L$5000 per day.

Hence my use of the word "Unless"

If it were somehow thought illegal - and authorities came asking Linden Labs for cooperation, at that point I think they would do so.

Reguardless of the TOS and disputes between residents provision.

Without that happening though, like I said in the other thread when I agreed with your post, its unlikely the lindens will do anything.

Even if Ginko said "sorry we went bust" and didnt want to pay anyone back.

Unless by Ginko doing that the Lindens decide (always a possibility) it was a Ponzi scheme and risked being illegal.

Thanks--that indeed clarifies the point, and I think it's valid. The "pretend" status of this "virtual investment company" precludes much if any legal remedy. (Although that doesn't appear to apply to in-world IP, which seems just as "pretend" as the currency, but that mystery isn't really germane to this discussion.) I don't think, long-term, that's a good situation for SL, nor LL's forward revenue, but that doesn't diminish its validity.