Your2ndPlace

In October of 2006, I interviewed Ginko Financial's CEO, Nicholas Portocarrero. At that time, Ginko Financial was accused of being a ponzi scheme by Anshe Chung and others.

Now the whole situation has popped up again, with Benjamin Duranske speculating that Ginko is either a fraud or mismanaged. He's got some interesting facts put together. And with the present withdrawal limit of 5,000 Linden dollars a day, there is room to speculate a lot. When Arbitrage Wise sent me an IM Thursday evening about withdrawal issues at Ginko - I checked (I have some money stashed away in Ginko) and was able to withdraw money that evening. Today, however, I have verified that the 5,000 Linden dollar withdrawal limit is real.

But then - if it were a fraud, wouldn't Nicholas have packed up and disappeared like some of the businesses that made IPO at WSE Live? Runs on banks are not anything new. Most countries have laws about banks having enough funds on hand, a float, to deal with runs. In Second Life, banks are unregulated and are considered high risk investment. Consider what happened to Second Life Investment Bank - but then, remember, Lindsay Druart built on those ashes.

There are issues with Ginko Financial's lack of transparency - there always has been a lack of transparency - but despite controversy and the lack of transparency, Ginko Financial is still around. It is difficult to say what the future holds with Ginko Financial; I am not quick to damn a bank which is probably the longest lived in Second Life. On the other hand, the facts that Benjamin Duranske points out do require some thought and attention - especially by the people behind Ginko Financial.

With the rumor mill working over time and a general lack of communication, it is likely that the run on Ginko Financial will accelerate because of the recent round of criticism compounded with very small withdrawal amounts. But, if this were indeed a fraud, Ginko would probably have disappeared altogether. It's time to wait and see.

As for me - I have money in Ginko Financial. And for now, it will stay there. Why? It's a risk, but it is one that I am willing to take based on the fact that it didn't just disappear. I will revise that opinion as necessary, but that is my responsibility. Your money is your responsibility.

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