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It’s Not a Wonderful Second Life

Created: 28 Jan 2008 08:00:00 GMT • Updated: 23 Jan 2014 18:42:45 GMT
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It’s not very far into 2008 and sadly we are already seeing some of our predictions on the security trends of 2008come true. I blogged earlier that our security analyses expected to seeold style cybercrimes turn up in virtual worlds. While it’s not clearif any crime occurred, they did experience an old fashion run on banks.Unfortunately, unlike in the movie “It’s a Wonderful Life” there was noGeorge Bailey to stop the bank run.

There is a highly developed economy in Second Life and manybank-like businesses virtualized to handle people’s money. Like socialnetworks, virtual worlds create a sense of trust in their users. Sowhen offered interest rates as preposterously high as 40 percent, manySecond Lifers didn’t give it a Second Thought (apologies, that pun wasunavoidable). To Second Life’s credit they tried to get on top of theproblem by announcing on January 8ththat they would ban offers of interest on investments unless the bankcould offer “proof of an applicable government registration statementor financial institution charter.” The end result was that most ofthese “banks” would end up having to close on January 22nd.

Unfortunately, this caused a run on the banks. And some of them,most notoriously a bank called Ginko, just disappeared with people’svirtual money. What makes this bad is that virtual money in Second Lifecosts real money and the pain in the pocketbook people felt was notvirtual.

The Los Angeles Times covered the storylast Tuesday. It’s a good article and while there is no George Bailey,there are mermaids, storm troopers, and a very large rabbit.