Wow! Linden Labs did something right this time. You ask what it is? Well, in a post by Ken D Linden at Second Life’s Official Blog as of January 22, 2008 virtual banks in Second Life will seize to exist. Quoted text below:

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.

I guess those virtual banks who can show proof can stay but as far as I know, with regards to banks, banks in Second Life have no actual affiliation to any real life banks anywhere in the world or that they are accredited or licensed to operate by any government. In fact, many, if not most or even all, of them are operated by average people like you and me with no real banking experience whatsoever.

Banks in Second Life are really just a scam. They are unregulated, has no accountability and can ran away with your hard earned linden dollars anytime. What still surprises me is that, after the downfall of Ginko residents continue to place their linden dollars into the many banks that appeared in-world. Yeah, the high interest rate is very attractive but that’s the biggest clue that it’s a scam.

The only time that I will deposit my linden dollars in a bank in Second Life is when that bank is regulated, accredited and licensed by Linden Labs to provide banking services in-world but if not then it’s just another scam.

Thus, as we did in the past with gambling, as of January 22, 2008 we will begin removing any virtual ATMs or other objects that facilitate the operation or facilitation of in-world “banking,” i.e., the offering of interest or a rate of return on L$ invested or deposited. We ask that between now and then, those who operate these “banks” settle up on any promises they have made to other Residents and, of course, honor valid withdrawals. After that date, we may sanction those who continue to offer these services with suspension, termination of accounts, and loss of land.

So, if you have any linden dollars deposited in any banks then I strongly suggest you pull them out now before these so called banks lose their ability to pay their depositors.

Linden Labs may just be protecting themselves from future legal liabilities but they are also just protecting us and our linden dollars. Anyway, this new policy does not mean banks are out completely. If they are serious about their business then they already know what to do and that’s to show “proof of an applicable government registration statement or financial institution charter”. If not then bye, bye to you and to your scam!