Bankers in SL are scrambling as depositors demand withdrawals greater than their liquid cash can cover. January 8, Linden Lab announced it would change the rules for SL banks on January 22. Banks had to comply with a request for “proof of an applicable government registration statement or financial institution charter” or stop paying interest, according secondlife.com’s blog.
Only giving two weeks to comply was seen as a hardship on banks. Arbitrage Wise, CEO of SL’s largest bank, JT Financial said, “Prior notices could have been made to help banks better prepare for the implementation of the policy. But, I also understand the other side of the story that this could also give fraudulent banks time to scam more money and run. In the end, what’s done is done, and we just need to move on and deal with it.” JT Financial submitted a copy of an LLC, registered Wise Metaverse LLC, located in Richardson Texas. This document was declared insufficient documentation by Linden Labs. Wise said, “At this point in time, we are not pursuing a bank charter and will make the necessary changes to fully comply with Linden Labs’ new policy.”
JT financial holds two thirds of deposits in SL amounting to nearly 89 Million Lindens with 10,000 customers. They do not plan to pay interest in the foreseeable future. All banks appear to be working to liquidate assets to pay demands from depositors. Could these policies mean more than just restrictions on banks?
Tyrian Camilo of SL Investors Bank says, “In my opinion, they are saying a lot of things with their policies. Not only that “banking is bad, OK?”, but also they cannot decide is L$ a currency, or value-limited license use right. Even further, they are telling us, any business within SL, should be a registered business, and treated like an RL business, with full extent of RL regulation and legality. Meaning, if you like to do clothes, and sell them to others too, other than just your friends, you’d have to be an LLC even you would profit say 10 bucks a month. Just like in RL.” SL Investors Bank has 810 depositors with over 13.4 Million Lindens in assets.
What will customers of the banks do? See the article, “Linden Lab Law Makes Bank Customers Wait.” Jim Sella for iReports.
Submitted by Jim Sella