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Here come the bankers

May 14th, 2007 (Visited 2319 times) Tags:

Reuters/Second Life » UK panel urges real-life treatment for virtual cash

He recommended treating virtual currencies like the Linden dollar as “real money”, including a requirement for virtual world operators like Linden Lab to report suspicious financial transactions, just as for real-world banks and financial institutions.

Well, some of us have been warning of this for a long time. The article concludes with a quote about how once the virtual worlds are set up in Belize or the like, it will all get much messier…

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3 Responses to “Here come the bankers”

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    1. Amaranthar said on May 15th, 2007 at 4:22 am:

      It’s a given. If you invest money through an investment company, and move it around selling and buying stocks and bonds, it’s pretty much the same thing as what second life has, isn’t it?

    2. Capstone said on May 15th, 2007 at 5:57 am:

      Despite what companies like Mythic pretend, virtual money is treated like the real thing and therefore is the real thing. Just like that old Roman coin sitting on my desk—it has no real value, but if I take it to the right person, I can exchange it for dollars (or pounds or euros, etc.) And that transaction is subject to governemnt regulation and taxation. ICK, I can just see an IRS office in WoW or DAOC now…..

      What is interesting, is that I never really considered virtual money as a means for money laundering. But with more and more liquidity in virtual worlds, that isn’t shocking.

    3. Prokofy Neva said on May 16th, 2007 at 12:14 am:

      What I didn’t get about this was the claim that SL is like the immigrant banking system you have with Russian and other Asian and African countries, where you give a person in the U.S. $1000, and their relative back in Russia gives your relative $1000 equivalent.

      It’s not like that, because you pay $3.70 US to the exchange and get $1000 from the system. You are buying from another resident who put out their money to sell but it’s not as if they are in Vladivostok and you are in New York. And when you buy things, you use a price interface that is no different than any Internet payment template. Unless you’re willing to say the whole Internet is like immigrant banking, I don’t see that this holds.

      I think since the Lindens so have some kind of alert system that halts trades if there are large and suspicious transactions that they are set up to be able to cooperate with some RL investigation. I suppose that’s what we’ll see next, after casinos and child pornography.

      Supply Linden sold only $700,000 US worth of money out of thin air in March, BTW, after what appeared to be a significant casino owner cash-out when LL said they would no longer accept advertising for casinos on the forums and classifieds. Many still operate but without that traffic-inducer of the ads, they don’t have enough business. In April, Supply sold $800,000 plus. I think it was in January, he made his first million US in sales.

      Normal countries don’t print and sell currency like that, it can’t be regarded as a good monetary policy.

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