I'm talking to Nicholas Portacarrero right now. And also Forepawz Golem and Hiroserm Rebus. Last night, I noted that the Ginko terminals had ceased to accept deposits -- though apparently they still were giving withdrawals. They gave a message that they were "offline". Now, as of 8:30 pm SLT, they still are not accepting deposits, and giving a message that they are "offline". I got this statement from the guards from Nicholas' own announcement on his forum, ""We have stopped deposits to keep people unaware of the situation from depositing money into the system."
To be sure, I saw some brand-new people roll up to the terminal at Pharos Island without any knowledge of the affair, and one avatar begin to instruct another in the wonders of high-interest risky deposits -- accurately, in fact. Rumours are floated by that busybody Nobody Fugazi and others (he's actually blocked me from reading his site -- chuckles -- as if you can block the Internet!) -- that Ginko will force-convert everybody's deposits to bonds at the much-discredited World Stock Exchange.
Nicholas says he has "no comment" about anything to do with the bonds -- and rumours that he will convert all deposits to bonds in the World Stock Exchange. He also says he hopes to bring the terminals online again, but had no specifics. UPDATE: by 8:45 pm the notecards at the terminals were giving the announcement that all deposits have been turned into "perpetual bonds" at the World Stock Exchange.
I asked Nicholas what he thought had brought on the run on the bank. "Gambling ban, without a doubt," he said. There are stories out now about his investments in casinos; he had no comment. He never comments on where his investments are....were....
I asked him if Benjamin Duranske, getting up posses to come and confront Ginkos and AVIX, and siccing the RL media on this matter of financial institutions in SL -- roaming around like a wannabee prosecutor -- had more than a little to do with the run? Nicholas replied, "He fueled it, but he definitely didn't start it."
Totally. And that's why Duranske cannot take credit for bringing it down, though it's clearly something he's like to put on his virtual resume. He can only take credit for *fueling it* -- and that's something everybody trying to get out deposits and contemplating the whole picture has to keep in mind, about the nature of trust in virtual worlds, and panic-mongerers.
I've been contemplating the issue of fragile virtual institutions, as we all are, and I have to conclude I'm rather angry. Not angry that somebody is "defrauded". Because they aren't.
Nicholas is absolutely correct that he hasn't committed fraud, because his notecards, website, and explanations about his bank and its features have always been straightforward.
Here's a card from March 11, 2005 that I happen to have in my inventory from Ginko Financial's terminal:
Ginko Financial allows Second Life users to open savings accounts with a daily yield which allows them to make money on their spare cash, instead of just letting it sit in their accounts doing nothing. Ginko Financial takes part of the total cash deposited and gives loans to various trustworthy entities and persons, to make the money necessary to pay the daily interest rate. We keep a healthy reserve in pure linden dollars to pay people who wish to take money out of their accounts, so almost all withdrawals are cleared within minutes/hours, some being instantaneous. We would however like to make clear that, in order to pay the interest rate, we must put the money to profitable use. That being the case, we cannot guarantee that we will always have enough to pay people quickly, though we will endeavour to do so. Also, there is inherent business risk involved in this venture. These accounts not being insured in any way by any government, like in the case of most real life savings accounts, we cannot guarantee that we will never go bankrupt. Of course, we don't want to, and will work to keep our institution solid, but you must understand that the risk exists."
Like it says on the can, people. Caveat emptor. If you paid into this object owned by GF Ambassador, and you are now crying and wailing, I guess you don't read the cards.
At that time, in 2005, here's what was said about interest:
"Every day at 00:00 (midnight) EST your account will receive interest based on your account balance. This is paid to your savings account, not your Second Life account. You can check the interest rate that you are receiving by checking your balance. When this was written, the standard interest rate (they can be customized for customers with special needs) was 0.145%, which means that for every L$1,000 you have in your account, you will receive L$1.45 daily, which translates into about L$10 each week."
This interest of 2005 was steadily reduced, and reflected in the cards and search ad. So if you paid the slightest bit of attention, and contrasted and compared Ginko's with your RL bank, which might give you 1.5 or 2 percent interest on a savings account and only 5 percent on a locked-up CD with a minimum amount and term, then you'd realize that this was "a deal too good to be true". And yet...it worked for some 3 years.
REAL-LIFE INTRUSION TO THE IMMERSIVE VIRTUALITY
So why am I angry? Because an inworld virtual institution -- as flawed and as stupid and as risky and as everything as it is -- was destroyed by "real life" if you will. Well...not even real life *as such* in all of its grand real-ness. More...real life *anticipated*; real-life *assumed* -- which is, of course, it's own virtuality lol.
So it was...Real life law -- which came in the form of a US gambling act which didn't exist at the time that Ginko's was formed, or the investments in casinos were made. A law that Americans, Europeans and Asians question and at one point the WTO. Sure, it's the law. But...it may not always be. Laws that aren't just are often overturned -- there are plenty of comments from law students and lawyers all over about the UIGA. It's humorous to me that people can triumphantly gloat that another law criminalizing virtual child Internet porn (Ashcroft) could be struck down on challenges from litigators -- and not realize that there's nothing set in stone about the UIGA for that matter. It's applicability to all SL games remains to be seen; I see this argued vehemently everywhere. I also see a fair number of casinos that simply have not shut down, including owned by some surprising avatars.
Real life took the form not only of the Lindens, apparently, making a business decision to pre-comply with UIGA without actually waiting for any kind of criminal probe from the FBI. And it also took the form of Benjamin Duranske showing up "with smart people" as he put it and asking "hard questions". They aren't *new* questions -- they'd been asked before, and Ginko's weathered it before.
But the combination of the gambling ban, the heist at the WSE, the panel on stock exchanges that only served to make the characters involved look more lame and dubious -- and the persistent drumbeat from "Virtually Blind" practicing law in virtuality (something even Duranske concedes may be unethical) making judgements and pronunciations about what is criminal.
That's wrong. And it's wrong not only for RL, but for SL -- that is, if much SL really exists anymore.
DESTROYING THE VIRTUALITY IN ORDER TO SAVE IT?
People like Duranske who scorn their avatars as mere email insignia they could discard, who don't view the world as something immersive that they have a stake in, who are merely eager to use it as a vanity extention of their RL propaganda exercises -- part of a techno-utopia they hope will give their uploaded brains immortality some day -- they've been rather destructive of our fragile world, as it happens.
Well, if RL is RL, and it barges in the door with a warrant, what can you do?
Plenty. The Internet fought back against Ashcroft; the Internet fought back against RIAA; the Internet is considered a free kingdom where anarchy reins. And it would be good if virtual worlds aquired a little more sinew and fighting spirit of that type -- that virtuality not become beholden to one company and its concerns about how it looks before an IPO; and one company's "business decisions" to "limit liability for litigation". One of the ways the Internet has been able to persist despite all the real-life regulators is by being portable, anonymous, light, dispersed -- sinewy. And virtuality must become the same way.
It's an awful thing when lawyers from RL -- litigators on behalf of a client one can only call Realifism with a destructive and vengeful agenda toward virtual life -- can decide something for a world -- something that even the Lindens didn't decide.
WHO SHOULD REGULATE?
Because the Lindens, who own these servers, and who accepted the mandate to ban gambling, didn't utter a word about banks, financial operations -- Ponzis and pyramids though they be. I've sat in office hour after hour -- including Robin's yesterday -- in which people who were scammed by island resellers, for example, got absolutely no comment or sustenance. LL doesn't mediate disputes between residents -- full stop. They have always issued disclaimers, that they make no comment about these banks. If anything, Philip has spoken enthusiastically about them in principle as making it possible to monetarize online time in virtual worlds.
When any group of residents -- bringing in their RL credentials (or propagandized credentials, some are hard to check) come barging in the door and swinging the billy club, we have to be concerned. It's not only about democracy, and the right of a country to decide its own affairs without external interference. It's about the lack of standing such individuals have -- and lack of accountability. They don't represent even real-life institutions with standing. They are not elected, appointed, or even particularly acclaimed in RL or SL. They don't represent anything but themselves. Indeed, precisely because they don't have standing, they reach for the weapon of RL media to bang on people they don't like within SL, and pressure the Lindens.
We cannot allow the world to be governed in this way. We shouldn't be giving up without a fight.
I don't support or condemn Ginko's. I believe, as I've said before, people should have the right to make their own decisions, especially when a clear statement is made on the can, and when in this case, we've had far more disclosure from this particular outfit than most of the fly-by-night characters around the WSE. It doesn't inspire trust in me personally that Ginko's is hitched up with Intlibber -- in part I'm finding that Nicholas just isn't very well briefed up on Intlibber and takes him at face value.
I asked Nicholas what he would suggest people to do to help. He replied that it was beyond one person helping. And obviously, nobody is going to come along and hand a young Latin American dude a million US dollars to fix up his banking scheme in a synthetic world.
But he did suggest one concrete thing: stop accusing him of fraud. He would like to see people behave as adults, stop being hysterics, and making accusations. And judging from the brief but abundantly clear statements on the card freely available at every terminal and on the website, whatever you want to accuse Nicholas of, deception in advertising is not one of them.
I asked him if he could foresee any business entity buying out Ginko -- it's debt. "Yes, that is possible," he said. Not likely. I suppose the bond conversion is a strong liklihood, as getting through the mounting queue of withdrawal requests, even giving the increasing deposits and CDs in the last week, is probably too difficult.
And if that's the case, Europeans like Gwyn Llewelyn and Eloise Pasteur, and Americans like me (I have only a small amount deposited) are likely merely to accept the bond conversion and hope for the best.
LINDENS, STAY OUT OF IT!
I would urgently call on Philip Rosedale to stay out of this one -- unless, of course, he is looking at a real-life FBI warrant -- which he is *not*, most decidedly. The Lindens have no precedent for intervening in disputes, especially involving fraud and theft allegations (GIGAS was a particularly bad exception they indulged in once). They have no rules about this. No standing! THEY don't have standing EITHER! So they need to leave it alone -- just like they don't uphold Stroker's IP for him -- he has to get a lawyer. Those concerned about Ginko or any other resident made operation need to get RL lawyers to pursue their claims -- and stop trying to globalize their paranoia, hatred, and distrust and sic it on their fellow residents. If this Pandora's box is opened up, it will have a terrible chill on the world. Terrible.
The idea that the Lindens should attempt the seizure of property and redistribute it based on some perceived queue of investors -- what Duranske is urgently proposing and using the bullhorn of RL media -- is an awful one. Lindens should not suddenly start regulating disputes when they have no procedure or precedent for doing so. They should stay away from this; in fact, to get involved is to become responsible in ways they should not. They claim they are turning the world over to residents? So be it.
But that doesn't mean all of us have to roll over for every puppy fresh out of law-school frolicking with the heady enthusiasm of being suddenly in demand for sound-bytes. Nor should we allow untethered personalities like Ashcroft Burnham to concoct exotic justice systems.
The fall of Ginko's may give Duranske, Nobody Fugazi (another busybody going around fuming and fussing and posting breathless news bulletins) and others a gloating sense of self-satisfaction that pump up their failing RL egos. They can add to their belt the pelts of yet another virtual monster destroyed at the intrusion of their "reality".
An amazing piece of hypocrisy in all this is the way in which Duranske, Nobody Fugazi, and others bleating about the casinos and Ginko and WSE -- with Puritanical, firey, self-righteous zeal -- have taken completely opopsite positions -- or no position at all -- on the other intrusive bids from RL to SL.
In fact, those waxing most gloating about the casinos and smugly watching (like Csven Concord) became absolutely apoplectic when it came to the Lindens moving against simulated child porn after the German prosecutor's probe. They insisted on US standards for porn trumping all. They stand idly by, while land is devalued in blatant tortious actions by Chrischun Fassbinder and others who put up 16 m2 signs at extortionist prices to "buy back the view". They haven't had hardly anything to say about island re-sales. No-show builders who skip off with down payments, or shoddy television sets -- no, that doesn't capture their zealous attention to root out fraud. Stroker's case is something they applaud. In fact, we're starting to see the shape of it -- not only an imposition of the American perspective on law, but a perspective that rewards hedonism -- except when these particular wannabee litigators don't like it -- and that usually involves somebody attempting to make money outside of their own approved sphere of money-making activities -- to ensure ultimately that they can control economies.
INTRUSIVE VIRTUAL COMMENTATORS
Yet as I pointed out in the MIT Technical Review article's comments, they are virtual commentators, too. They have no standing. And the precedent set by having these kinds of "credentialed experts" come in and run Second Life when so many other people have a vested stake in it is awful, awful, awful -- really nauseating beyond words. Their clumsy, bullying efforts to accuse me falsely of libel for criticizing them is also to be roundly condemned.
Virtuality is too important to leave to the Lindens to run; but we can't leave it to these self-appointed motley crew of experts, either. They may cry that if we don't let them paw over everything and "self-regulate" (um, they mean appoint themselves as net-nannies) that RL regulators will come in the door.
Hey, give me a RL regulator, tethered to a RL democratic and accountable government following due process and some kind of procedures with oversight *any day* by contrast with trial-by-the-RL-media and SLogosphere.