Ginko Financial
Encyclopedia
Ginko Financial was an alleged Ponzi scheme
on the social networking video game Second Life
. It offered accounts denominated in Linden Dollars, which would be paid extremely high interest rates (at one point 0.145% per day or 69.7% per year), ostensibly funded by undisclosed investments.
Many of the bank's investments were believed to be in in-game casinos. In 2007, after Linden Labs placed restrictions on in-world gambling, there was a run
on the bank which caused it to collapse. All remaining accounts (by then worth 200 million Linden Dollars) were compulsorily converted into perpetual bond
s.
After the collapse, Linden Labs introduced a rule that interest-paying accounts in Second Life could only be offered by organisations with real-life banking licenses. .
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
on the social networking video game Second Life
Second Life
Second Life is an online virtual world developed by Linden Lab. It was launched on June 23, 2003. A number of free client programs, or Viewers, enable Second Life users, called Residents, to interact with each other through avatars...
. It offered accounts denominated in Linden Dollars, which would be paid extremely high interest rates (at one point 0.145% per day or 69.7% per year), ostensibly funded by undisclosed investments.
Many of the bank's investments were believed to be in in-game casinos. In 2007, after Linden Labs placed restrictions on in-world gambling, there was a run
Bank run
A bank run occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent...
on the bank which caused it to collapse. All remaining accounts (by then worth 200 million Linden Dollars) were compulsorily converted into perpetual bond
Perpetual Bond
Perpetual Bond is a Big Finish Productions audiobook based on the long-running British science fiction television series Doctor Who.The Companion Chronicles "talking books" are each narrated by one of the Doctor's companions and feature a second, guest-star voice along with music and sound...
s.
After the collapse, Linden Labs introduced a rule that interest-paying accounts in Second Life could only be offered by organisations with real-life banking licenses. .