Failure of Second Life's Ginko Financial Leads to Calls for Regulation

Failure of Second Life's Ginko Financial Leads to Calls for Regulation

Bank Failure in Second Life Leads to Calls for Regulation By Bryan Gardiner

The recent collapse of Ginko Financial, a 'virtual investment bank' in Second Life, has spurred calls for more oversight, transparency and accountability, especially when it comes to business practices in the metaverse. Last week, Ginko Financial -- an unregulated bank that promised investors astronomical returns (in excess of 40 percent) and was run by a faceless owner whose identity is still a mystery -- announced it would no longer exist as a financial entity.

The declared insolvency meant the bank would be unable to repay approximately 200,000,000 Lindens (U.S. $750,000) to Second Life residents who had invested their money with the bank over the course of its three and a half years of existence.