Run on the banks in SL

[Furiously]

Appears the casino's closing is having another effect on the game...This could make some of the EVE scams look like penny theft.

http://www.technologyreview.com/read_article.aspx?id=19193

[schild]

Shocking, only because Second Life is a modern day old west with dildos.

[Nerf]

In an interview with Duranske, Sanchez, who says he is in his twenties, explained that he started a bank in Second Life after reading the biography of a famous banker. "In the beginning, even if I were to fail, it would be fairly easy to just pay people from personal income," Sanchez told Duranske. The problem, Duranske says, is that the idea doesn't scale. According to Ginko's website, current deposits total more than $750,000 in U.S. currency

Maybe my moral compass is off, or I don't have one..but if I were a 20 year old Brazilian kid with $750,000 US held anonymously on the honor system, I'd cash the fuck out, especially when it seems like a huge recession is imminent.  Is there a system in place that's stopping him from doing this? The linden exchange won't accommodate large transactions?  There has to be something stopping him, or he would've already been kidnapped and beaten for his account password.

(Edit by Yoru: fixin' your quote tag)

[Furiously]

I'm not sure how to read this...

https://secure-web3.secondlife.com/currency/describe-limits.php But that is the transfer limits. Needless to say there are some checks and balances in place.

[Nerf]

Since he runs what is apparently one of the larger banks on SL, I'd hazard two guesses.

1) He is level 4, from the charts higher up it appears that level increases with age.

2) He falls into one of the 3 categories in the above chart.

That means at most it's 2 months to cash out, even if LL somehow deems it "illegal activity", which I highly doubt as the article mentioned some sort of player-run governing bodies being formed, he's still looking at $20-60grr for every day he gets away with it.

Someone needs to go kidnap this kid and torture him until he gives up the details. (If it hasn't happened already due to his name being released)


I in no way reccomend or condone any illegal actions.  Kidnapping is probably illegal in Brazil, I would advise against it.  Speaking of Brazil, man have they got some dirty porn - I mean filthy nasty donkey show setting women on fire nasty porn.  I need to visit Brazil.

[Trippy]

Interview with the two principals:

http://www.secondlifeherald.com/slh/2007/08/ginko-financial.html

[Ratadm]

How do you not cash out?  I mean how long could you live on 3/4ths of a million in Brazil?   Also if he does it, it would be the greatest mmo scam ever.  It would be interesting to see if Linden would allow him to do it I mean that's no longer chump change and it's obviously got real world value.

[Trippy]

How do you not cash out?  I mean how long could you live on 3/4ths of a million in Brazil?   Also if he does it, it would be the greatest mmo scam ever.  It would be interesting to see if Linden would allow him to do it I mean that's no longer chump change and it's obviously got real world value.

He can't cash out fully cause most of it is tied up in assets that he would have to try to sell, most likely at a significant discount if he tried to dump it all at once. This is why they've placed a cap on the total amount of withdraws they can handle each day.

[Hoax]

I still work down the street from these guys and I demand that I be part of any f13 Bay Area delegation that goes and does shit at Linden Labs.

Also I can't believe we dont have f13 t-shirts.  Fucking shenanigans.

[CmdrSlack]

How do you not cash out?  I mean how long could you live on 3/4ths of a million in Brazil?   Also if he does it, it would be the greatest mmo scam ever.  It would be interesting to see if Linden would allow him to do it I mean that's no longer chump change and it's obviously got real world value.

He can't cash out fully cause most of it is tied up in assets that he would have to try to sell, most likely at a significant discount if he tried to dump it all at once. This is why they've placed a cap on the total amount of withdraws they can handle each day.

Yeah, the odds of him running with 740k are low, but only because it'd be hard to really extract that. It's the same thing with Anshe Chung. Sure, she is worth 1 million USD on paper, but if she was to cash out all of her land, etc., she'd never end up with that much dough.

[Kamen]

Appears the casino's closing is having another effect on the game...This could make some of the EVE scams look like penny theft.

Having read the reports and interviews to me this smells more like incompetence than a scam.  People are always quick to scream "scam" and "Ponzi scheme" because it's so much easier to excuse losing your money to a scammer (which makes you a poor innocent victim) than admitting you stupidly gave your money to a fool whose business plan and interest rates were a total joke.

If I'm reading the reports and interviews correctly he's:

A) Still there
B) Paid out all the liquid cash he had after the run started
C) Lowered the interest rates he's now willing to pay
and D) he's trying to put together a new half-assed plan to exchange deposits into promissory notes.

If he is a scammer why would he have paid out anything after the run started?  Why should he still be there at all at this point?  A scammer would have been moving most of the money out as fast it came in until the inevitable collapse came, or until he judged it to be time to pull the plug. To me this just sounds more like some kid who got in over his head and a bunch of greedy dumbasses who couldn't be bothered to do any due diligence willingly lining up to give him their money.

[Slayerik]

So he can start the slow process of withdraw. ;)

[Furiously]

The interesting story to me is the person who hacked the ATM and got $12,000.00 USD from the World Stock Exchange.

[schild]

I still work down the street from these guys and I demand that I be part of any f13 Bay Area delegation that goes and does shit at Linden Labs.

Also I can't believe we dont have f13 t-shirts.  Fucking shenanigans.

:(

[Furiously]

You know, with the steam account logo they would be pretty cool...

[schild]

Oh, agreed. It would cost an asston to get grind printed on every square inch of a shirt though.I need to revise that design. I've actually got something in mind though.

[Numtini]

On cashing out of SL, I know that a lot of people have complained about the speed at which Linden approves higher trading amounts. It's entirely possible to be rich in SL and have the lowest real dollar trading amounts. Also, with a bank, how much is he taking out anyway? The investments should be within the game.

$750k strikes me as an amount at which Linden might become compelled to do something if someone walked with all of it. The "I cannot help thee with that" attitude of Linden might work with amounts suitable for small claims court, but I suspect it's not going to stick with amounts into the hundreds of thousands of dollars.

[tmp]

I still work down the street from these guys and I demand that I be part of any f13 Bay Area delegation that goes and does shit at Linden Labs.

They got that covered damn well on their own already...

[Furiously]

Oh, agreed. It would cost an asston to get grind printed on every square inch of a shirt though.I need to revise that design. I've actually got something in mind though.

Get rid of the grind. The wings are nice.

[Nerf]

On cashing out of SL, I know that a lot of people have complained about the speed at which Linden approves higher trading amounts. It's entirely possible to be rich in SL and have the lowest real dollar trading amounts. Also, with a bank, how much is he taking out anyway? The investments should be within the game.

$750k strikes me as an amount at which Linden might become compelled to do something if someone walked with all of it. The "I cannot help thee with that" attitude of Linden might work with amounts suitable for small claims court, but I suspect it's not going to stick with amounts into the hundreds of thousands of dollars.

From what I understand they sidestep a mighty shitload of legal issues by claiming the "service provider" angle.  An ISP would be overstepping their bounds doing that, and it might open them to all kinds of legal trouble.

[Trippy]

On cashing out of SL, I know that a lot of people have complained about the speed at which Linden approves higher trading amounts. It's entirely possible to be rich in SL and have the lowest real dollar trading amounts. Also, with a bank, how much is he taking out anyway? The investments should be within the game.

$750k strikes me as an amount at which Linden might become compelled to do something if someone walked with all of it. The "I cannot help thee with that" attitude of Linden might work with amounts suitable for small claims court, but I suspect it's not going to stick with amounts into the hundreds of thousands of dollars.

From what I understand they sidestep a mighty shitload of legal issues by claiming the "service provider" angle.  An ISP would be overstepping their bounds doing that, and it might open them to all kinds of legal trouble.

They are not a service provider.

[SnakeCharmer]

On cashing out of SL, I know that a lot of people have complained about the speed at which Linden approves higher trading amounts. It's entirely possible to be rich in SL and have the lowest real dollar trading amounts. Also, with a bank, how much is he taking out anyway? The investments should be within the game.

$750k strikes me as an amount at which Linden might become compelled to do something if someone walked with all of it. The "I cannot help thee with that" attitude of Linden might work with amounts suitable for small claims court, but I suspect it's not going to stick with amounts into the hundreds of thousands of dollars.

From what I understand they sidestep a mighty shitload of legal issues by claiming the "service provider" angle.  An ISP would be overstepping their bounds doing that, and it might open them to all kinds of legal trouble.

They are not a service provider.

Sure they are.  They provide a service that allows players from all over the world to communicate with each other and build a virtual world together; even if it's free.

I think you have to take a Clinton-esque view of the word 'service' like he did with 'is', but it's not too far of a stretch to call the SL client a service, whether it's for chatting, building, or jerking off.

[Trippy]

From what I understand they sidestep a mighty shitload of legal issues by claiming the "service provider" angle.  An ISP would be overstepping their bounds doing that, and it might open them to all kinds of legal trouble.

They are not a service provider.

Sure they are.  They provide a service that allows players from all over the world to communicate with each other and build a virtual world together; even if it's free.

They aren't in the sense that Nerf is using those words. Google "service provider" and DMCA for an example.

[SnakeCharmer]

Ah, I see. 

Roger that.

[CmdrSlack]

Yeah, Linden Lab puts a good amount of talk behind the "we're a service provider within the boundaries of the DMCA" line, but it hasn't really been tested as far as I know. I have many many misgivings regarding whether they're a service provider, but I try to keep an open mind for the sake of argument (and academic wankery).

In some ways they are like a web hosting service, but given the ratio of crap to good content, I'd say they're more like GeoCities. People can create content on site, or upload their own, given their talent level. That content is allegedly not monitored by Linden Lab, which relies on user policing to find examples of content that violates the terms of service. However, Linden Lab's many entanglements, both with in-world content regulation and the fully monetized economy, tend to cut against that service provider theory.

There's valid arguments both ways, but I find that the "not a service provider" angle is the most persuasive for me.

[Nerf]

I havn't really followed SL at all, like I said before it flew under my radar.  That being said, I'm positive that I read somthing in the kiddy porn articles that LL was trying to claim they were a service provider.  Their words, not mine.

[CmdrSlack]

I havn't really followed SL at all, like I said before it flew under my radar.  That being said, I'm positive that I read somthing in the kiddy porn articles that LL was trying to claim they were a service provider.  Their words, not mine.

Well sure, that's their best defense against most claims regarding the content on their servers. 

[Venkman]

Wasn't that Napster's angle too though? And I'm asking seriously. Users weren't uploading their own content to Napster but they were using the "service" they provided, and Napster seemed to have no desire to care about such use.

So, how did "service provider" not work for Napster but could for SL? Is it because LL hasn't incurred the wrath of the RIAA yet (which I find surprising) or something else?

[UnSub]

Wasn't that Napster's angle too though? And I'm asking seriously. Users weren't uploading their own content to Napster but they were using the "service" they provided, and Napster seemed to have no desire to care about such use.

So, how did "service provider" not work for Napster but could for SL? Is it because LL hasn't incurred the wrath of the RIAA yet (which I find surprising) or something else?

I think Napster's defence failed because, apart from downloading illegal copies of songs from it, what else could you use it for? Where was the other fair use aspect of it (such as video recorders being able to record home movies, as well as television programs)?

LL has a better shot at such a defence than Napster, because they can say, "Sure, SOME of our users do bad stuff, but hey, look at all the other people who make t-shirts! They aren't breaking any laws there!".

[Venkman]

Ok, so a proliferation thing? I can see that. Napster gave a bad name to P2P at the time iirc because while there were legitimate reasons to use it, the vast majority of use (incl. other things like Hotline) seemed to be to share software and media. But I was only peripherally aware of this stuff then then.

But just to clarify, you weren't downloading illegal copies of songs from Napster, you were getting it from someone else's drive through a bridge they created. That is actually different from SL where you can upload some content to their server (though not media files, which you must host somewhere they can link to).

[UnSub]

So that I'm not just talking out of my ass about this:

9th Circuit Napster Ruling Requires P2P Developers to Ensure No One Misuses Their Systems
Supreme Court's "Betamax" Defense to Secondary Liability Narrowed
Appeals Court Requires Judge to Rewrite Software to Prevent Infringement
By Robin D. Gross, EFF Staff Attorney for Intellectual Property

Like the district court before it, the 9th Circuit Court of Appeals found little sympathy for Internet music swapping service Napster, finding it liable for both contributory and vicarious copyright infringement. The decision chipped away at the famous holding in the "Betamax" case where the Supreme Court held that the movie studios could not outlaw a technology (VCRs) that was capable of substantial non-infringing uses. The appellate court then ordered Napster to police and control its systems to prevent future infringement and sent the case back to the district court for specific rulings about how Napster must rewrite its software to meet the court's requirements.

This ruling marks a stark departure from the Supreme Court's standard for third party liability in Betamax where knowledge that VCRs would be used for some infringement was irrelevant. In Betamax, the Supreme Court held that allowing copyright holders to ban devices capable of substantial non-infringing uses would go beyond the power of copyright monopoly, regardless of whether the creators knew their devices would be used to infringe copyrights.

Although the appellate court disagreed with the district court and held that Napster is capable of substantial non-infringing uses, it nonetheless held that the Betamax defense was unavailable to Napster because of its actual knowledge of specific infringement and unwillingness to prevent that infringement. This distinction narrows the protection for technology providers under Betamax since lawful uses of the system apparently become irrelevant once knowledge of infringement can be shown. And knowledge can be easily established by a content holder sending a "cease and desist" letter, rendering technology providers thereafter liable for the infringing actions of third parties who misuse their systems.

Under the ruling, "if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement." Furthermore, the court held that Napster materially contributed to infringement by providing the site and facilities for the infringement to occur. And the opinion could arguably reach to ISPs and upstream providers including technology companies and individuals.

From: http://www.eff.org/effector/HTML/effect14.04.html

Okay - LL also needs to show that they were policing their servers to stop such a thing from happening. Napster were too hands off, according to the final decision.

[Venkman]

Interesting. But here again I gotta wonder about Napster tech. They didn't have anything on their system. People were pushing content through their tools. Not enough of a nuance to absolve them legally of course, but by default they'd seem safer than, say, YouTube where that stuff is stored there. But then, in the years since, we've seen Google's approach to such things anyway.

So yea, back to SL, it seems that as long as LL can show due diligence in keeping huge amounts of copywrite infringement down, they seem to be able to dodge the bullet. But then, they can also thank their active players for this too. SL could be a great place to swap all manner of illegal data, but the culture doesn't seem interested in doing so.

And besides, there's plenty of other ways to do it without having to utilize a 3D world.

[Trippy]

On cashing out of SL, I know that a lot of people have complained about the speed at which Linden approves higher trading amounts. It's entirely possible to be rich in SL and have the lowest real dollar trading amounts. Also, with a bank, how much is he taking out anyway? The investments should be within the game.

$750k strikes me as an amount at which Linden might become compelled to do something if someone walked with all of it. The "I cannot help thee with that" attitude of Linden might work with amounts suitable for small claims court, but I suspect it's not going to stick with amounts into the hundreds of thousands of dollars.

From what I understand they sidestep a mighty shitload of legal issues by claiming the "service provider" angle.  An ISP would be overstepping their bounds doing that, and it might open them to all kinds of legal trouble.

They are not a service provider.

I take that back. If you stand on your head and squint it's possible Second Life might qualify, though they are certainly not an ISP (there are other classifications they may qualify for). However that still has nothing to do with exchanging real money for virtual money and vice versa. "Service provider" in this context has to do with the DMCA and copyright infringement and nothing to do with virtual banking.

[CmdrSlack]

You guys are a bit off on the Napster stuff, as far as the law goes.

Whether Napster was a service provider wasn't really at issue. The cases from 2000 don't really discuss the DMCA, although they do discuss elements of the service provider exception. Napster was unable to claim that it had insufficient knowledge of copyright infringement taking place via its system. Napster had a central server system where the library lists for each online user were stored and pushed out to other users. This meant that, at any time, the people over at Napster knew exactly what files were being shared across their servers.

From A&M v. Napster 239 F3d 1004, "The record supports the district court's finding that Napster has actual knowledge that specific infringing material is available using its system, that it could block access to the system by suppliers of the infringing material, and that it failed to remove the material"

This is different from a traditional service provider like an ISP or hosting service. Those guys really likely DON'T know every use made of their networks partially due to practical obscurity. Linden Lab wants to hold itself out as a service provider like an ISP or hosting service. The problem is that the company is aware of what goes in within the game world. LL tries to hide behind the "we rely on the residents to police for inappropriate content" line, but given LLs involvement in content management to this point, I think it's pretty easy to write that off.

So really, it only works for LL right now because nobody is suing. The defense might not really work for LL, but it's the BEST defense to use. I think that a lot of the recent media and marketing hype plus the standard Linden Lab/Philip Linden bloviating points towards fail for LL if it pulls out the defense.

However, LL DOES honor DMCA takedown notices. It has stuff in place to handle that. So, at least in the realm of copyright, it does do some of the stuff that service providers must do to comply with the safe harbor.

They would like to apply this "service provider" thing to lots of other issues that SL has. Those things have noting to do with the DMCA, so it's a bit harder to call. Imagine LL legal saying, "We didn't know people were doing that stuff, but we took stuff down when it was reported." That's pretty much the argument in a nutshell.