Second Life Bank Ban
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While not a complete “ban” of Second Life banks, many are choosing to see the new policy and describe it this way. The very start of the blog post says:
“As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter.”
The last prepositional phrase of that statement means that if an in-world bank provides proof of a legitimate business in the real world, or is actually a financial institution in RL, they will be allowed to continue operating as a bank in Second Life.
While this may seem like Linden Lab is banning all forms of banking in-world, it is really just banning the ones that are not set up as a legitimate business. If there are any Second Life banks that do not provide the correct information to Linden Lab, they will be banned or LL may “may sanction those who continue to offer these services with suspension, termination of accounts, and loss of land.”
So far, from what I’ve seen, only one bank (the one where I have my money), JT Financial has provided this information to Linden Lab. They operate under the Wise Metaverse brand, and have sent their Limited Liability Company certificate (PDF Link) in, already.
Now, when I first saw the news of this, my initial reaction wasn’t too good. It brought back flashbacks of the gambling ban and the huge loss of many users, falling land value, and the bank run that happened because of it. The thought that Linden Lab would, once again “create” a run on virtual banks was really just unbelievable. Since I’ve stepped back and had a chance to look at the overall picture a little more closely, I can see where they’re coming from, at least.
What still concerns me is the fact that a lot of the 150 comments on the SL blog post seem to be “asking” for things to be banned. Some want camping chairs banned, other want the Linden Exchange abolished (removing the ability to “cash out”).
What a lot of them don’t realize is that Linden Lab started down this slippery slope a while ago. By banning this and that, requiring EU “customers” to pay VAT, and now the “banking ban”, they are continuing down the slope to a desensitized, mirror of political correctness that’s already available in real life. They have no belief in personal responsibility, and will choose to set up cameras on every street corner to “protect” it’s residents, and themselves.
Looking back, a lot of people asked a lot of questions after the gambling ban, last summer. A lot of people made predictions about “what’s next” to be banned. A lot of people were right.
Can we start making more predictions about what will be next, now? In order to operate any business in Second Life, will you soon need to become a “proven” real business in real life? To buy and sell land, will you need a real estate license? We’re getting closer and closer to that point, no matter how you argue it.
January 9th, 2008 at 8:35 am
[…] Strange’s Second Life Blog — “Second Life bank ban” […]
January 9th, 2008 at 4:43 pm
When I first entered the world of SL economics, I considered Second Life to be something of a libertarian model, with Linden Lab having a mostly laissez-faire attitude toward the economy. (Not entirely as they collect “property taxes” and create land masses themselves.) After the gambling ban, I felt that they abandoned that libertarian experiment. Now with the whole affair with banking, they are abandoning the free market. If they extend this to virtual corporations, and I see that as all too near, then capitalism itself will be done away with. I suspect that a likely extreme will be akin to a feudal system with Linden Lab being the vassel lords.
January 11th, 2008 at 8:20 pm
I think you might do some more research. If Linden allows the scam artists to play bank in SL just because they have a formal LLC business License, this will not protect Linden from a major law suit that is stirring.
I’ve read a few places where Linden is denying company owners from playing bank. You have to have a BANKING LICENSE…
Have fun,
Me
January 11th, 2008 at 8:23 pm
That above PDF is just an LLC. No good. Sorry, that is not a banking license.
Linden will either refuse this and require a banking license or their efforts are vain.
January 11th, 2008 at 8:34 pm
So, “Me”, by your thinking, I suppose that every type of business owner in Second Life would be required to have the required license in RL to do what they do in SL. If they want to deal in virtual land, they would need to be a licensed real estate agent. If they want to sell scripted weapons, they would need a license to deal arms, and also need to enforce a waiting period. If they want to build houses and office buildings, they would be required to meet building codes.
If you actually did some research, you would realize that not all of the banks are “scams” (as you call them). If you believe everything that Linden Lab tells you, you’ll be in for a huge surprise, one of these days, when you realize that it’s no longer “Your World. Your Imagination.”
Could you cite the “major law suit” that is stirring? Has something been legally filed somewhere that I’m not aware of?
January 11th, 2008 at 8:37 pm
I should also mention that “Me” is correct in that the LLC was not accepted by Linden Lab. Unfortunately, they don’t offer any other information as to exactly what “is” accepted.