Your2ndPlace

Via notecard inworld from The Rock Insurance, Lindsay Druart sends a message to L&L Bank customers. A bit of background will be given after her release:

All Bank Activity Halted Until Further Notice

At about 3:50am SLT, I got an IM from Tyrian Camillo of SLIB stating that someone was depositing fraudulent lindens and to be careful. I looked at the bank records and saw a 10 million deposit from Betatester Allen who then withdrew $20,500. The account was disabled from Tyrian's alert and LL refunded back the $20,500.

I was checking the account to make sure they didn't ding us for 150% as per the TOS and as I was refreshing the screen, I watch the balance drop before my eyes. In a matter of 3 minutes, the ATM located at the Banking and Investment Center owned by Mateo Infinity on Vacit was hacked and payments made to an avatar by the name of Hamid Jewell totalling a little over 3 million linden running the bank avatar down to $24k. The exact total is not known currently since it was several transactions over the period of time and the legitimate transactions of the day are not showing up for me currently.

I have contacted Concierge and the Governance team are working on the issue. The alt account has been halted and the ATM returned. All ATMs are offline until further notice. All current CD accounts will be halted and returned to their account holders at their current balances. We are waiting for LL to finish their investigation and return the lindens. At that time we will evaluate the loss, if any and proceed from there.

This notice will be posted as many places possible and given to other banks to release as they see fit. I will update the market as I get information and I will be plugging at Concierge all day. I am taking off my RL job to get done what I can so I will be in world or at least in Gtalk if anyone wants to speak with me at lindsay.druart@gmail.com and I will gladly respond as soon as possible.

I ask that everyone keep calm until I get a resolution to this from Linden Labs. Thank you.

Sincerely,

Lindsay Druart

Background and Commentary

For those of you new to the L&L Bank, it wasn't too long ago when Lindsay Druart rescued SLIB and renamed it L&L Bank and Trust - under very much the same circumstances. This all relates to the well hidden part of the Linden Lab rules, which can be found in the documentation for the Risk API. The relevant section is this (emphasis mine):

...If Linden Lab, in its sole discretion, determines that a Second Life user has purchased Linden Dollars for real currency through any means other than LindeX, and that the seller of such Linden Dollars acquired such Linden Dollars through fraudulent means, or any other means in violation of the Terms of Service, then Linden Lab will consider the buying user a complicit party in the fraud or violation. As a penalty for participation in such fraud or violation, Linden Lab will reduce the Linden Dollar balance of the buying Second Life account (and/or any Second Life accounts owned or operated by, or affiliated with, the owner of the buying account), by any amount up to 150% of the amount of Linden Dollars involved in the transaction. In addition, repeated participation in such fraud or violation will result in suspension or cancellation of the buying party's accounts. (The selling account will of course be suspended or cancelled on a single fraud or violation at Linden Lab's discretion.)...

Oddly enough, this is not in the Terms of Service or Community Standards of Second Life - something which shouldn't be surprising considering that even the gambling ban isn't covered in the Terms of Service (VirtuallyBlind had an article on that, but I can't seem to find it).

The 'law' of the virtual world of Second Life gives Linden Lab a lot of discretion in deciding what they will do, which may or may not be influenced by a number of factors - including whether anyone slept on the couch last night. There is nothing definitive in how Linden Lab deals with such issues, and I can back that statement up with at least one example.

Lindsay's latest information on her blog indicates losses to the tune of 3 million Linden dollars, with some important information for investors as well as contact information. I imagine Lindsay will be quite busy with all of this.

Personal Observation

It seems a bit strange that Tyrian Camillo of SLIB would know that someone was depositing fraudulent Linden dollars - unless, of course, SLIB had the same problem. More than that cannot be said, but it immediately caught my attention. Granted, I do not like Tyrian's business practices - but that is a completely separate issue.

Also, it seems a bit strange that ATMs are being hacked - no reflection on the banks themselves, but on the software being used. I wrote about that before. Saying something was 'hacked' can cover a lot of things - WSE said the same when in fact they gave people modify rights on their ATMs. This made it look like a technology problem instead of a stupidity issue. I don't believe L&L suffered a stupidity issue - but the issue of banking software in Second Life is now called into question again.

And last, but not least, Linden Lab consistently invokes rules that are not readily apparent to the unindoctrinated - and indoctrination means losing 150% of whatever a fraudulent account drops on you. Who would expect less from Linden Lab?

While there are things that the community can do to make things better - such as standardizing banking software, etc - the onus still falls on Linden Lab to make Second Life better in this regard, as well as others.

Of course, it doesn't help that the Second Life economy is viewed as a product... unless, of course, Linden Lab figures out that it needs desperately to work on its product... at least enough so that it doesn't penalize businesses and Linden Lab customers through these proxies.

Technorati Tags: Banks Business Linden Lab Metaverse Op/Ed SecondLife L&L Bank and Trust Lindsay Druart Risk API Terms of Service Community Standards