Panic on the streets of Ambleside, panic on the streets of Sanshillyong, I wonder to myself, could life ever be sane again?
LL’s new policy on banking has certainly caused a storm, and more than just one in a teacup it would seem.
“Please read this if you operate, or have transferred L$ to, an in-world “bank” or financial company.
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. We’re implementing this policy after reviewing Resident complaints, banking activities, and the law, and we’re doing it to protect our Residents and the integrity of our economy.”
This is the opening paragraph of the blog, and is well worth reading, it’s also worth consideration but there could very well be positives coming out of this. I popped down to JTF to sample the mood (and see if I could withdraw my L$). However all I found was confusion, some guy who sounded English trying to explain to his Mom what was going on (We don’t all live at home with our Mom honest!) and very flustered JTF staff members (Including Arbitrage Wise himself) trying to calm people down.
Not that people wanted to be calm, some wanted to get the pitchforks out and burn the witch. However at this stage it’s totally unjustified, but due to the ridiculous amounts of people trying to use the ATM at JTF, the ATM wasn’t working well, leading to people then spreading rumours that everyone had lost their money, come on, would Arbitrage Wise be there if he had run off with the money?
JTF released a statement:
“Our withdrawal limits will remain at 100,000L per day, and we will not change it. We currently have a liquid cash reserve of over $100,000 USD that are in various and will begin liquidating some of the funds and move it back into SL.
Some of you may be experiencing difficulties in withdrawing your funds. This is due to the intense pressure that is being placed on our servers because of the mass amount of people withdrawing their funds. We ask that everyone give our server some time to process the transactions.
In order to assure that we will honor all our deposits, we are willing to sign any contracts that anyone wishes to ensure that they are properly paid, and are open to using such services as http://www.virginmoneyus.com.
In the meantime, we will try to be as accessible as possible and ask that everyone please remain calm and trust that we will follow through on our obligations.
Please remember that we have until Jan. 22 to come up with an alternative plan.
In order to be successful in business, you can’t worry about the problems, but rather, spend your time on the solutions – and that is what we plan on doing.
A very sensible statement but will people actually listen? I think part of the problem is that Ginko has made a lot of people twitchy and people won’t care about the reassurances but really, this is a sensible move by JTF at this moment in time. I don’t think Arbitrage will run off with my money, in fact I’m hoping he will come up with a plan to ensure he can continue to trade.
However if JTF can’t do that, then surely the market is wide open now for someone who will be able to get the paperwork required to operate and not only will that be good business for them, but it will be good business for residents too.
On the other hand, some banks will at this moment be teetering on the edge. Which banks I don’t know and what effect will this have on the economy or the land market?
The other issue of course relates to WSE shutting down for upto 45 days for security enhancements. Two big issues spring to mind, firstly will they still be able to pay the 25%PA bonus to all WSE account holders as previously stated and secondly, the timing is amazing isn’t it.
I attended Robin Linden’s office hour earlier today, Robin denied anyone had been tipped off about this:
Robin Linden: who’s Luke?
Oops sorry, wrong quote!
Robin Linden: We didn’t give anyone advance warning, this *is* the advance warning.
Now people will be cynical about this because of LL’s past history when I believe they have admitted giving people advance warning, however I like Robin and believe that she hasn’t tipped anyone off, she can’t possibly know that nobody else got wind of this though and LL has got a mole as exemplified when Cory left. However for now I’m buying it that this is just coincidence with the WSE shutdown …come on I can’t be the only one who thinks it’s coincidence!!!