Once upon a time...there was a bank in SL®

It is probably a disease. You get it from one person to another. Will it become a virus?
I have been following the story of the Whitfield-Hastings bank for quiet some time now, as I had some money invested before the bank was banned from Second Life. I still had some change money in there, and it seemed that I could even recover those few Lindens, but now the truth came out, and what I was thinking all along came out. It is like a fairy tale, but then with no happy ending. It does not matter to me, but some people have invested big money, and they will never see one Linden back.
Who is to blame? Linden Lab for sure, but as I said in the beginning, it is a disease, the way of communication, or the lack of communication, and after that….the lies.

The story about the banks is known to everyone, this story is probably not.

The Royal bank of SL was founded by Cristopher Whitfield, and was one of the best banks in SL, as they looked professional in what they did, the interests were good (too high, but that was adjusted after a while). All went well until the decision of LL to close all banks, and give them only a few weeks to comply with the new rules. All accounts were closed, no one could withdraw money from their accounts anymore, until everything was cleared. Some people were mad, others were patient. We waited…..

Suddenly, the sad news came that Cris had died in RL. That would mean that the bank was automatically bankrupt, no existence anymore, no funds…nothing.
Most members were sad to hear the news and expressed their condolences on the website. After a few days, a new avatar came in the picture, the RL brother of Cris, Steffen Bolton. He did not know anything about SL, but wanted to pay everyone out, as that would have been the wish of Cris. In no time he was able to learn about Second Life, bank business and other stuff. It was amazing to see, how someone was trying to please all the shareholders of the former bank. There was a little hope for the big investors that they would see their money again.
New contracts were made; all shareholders had to agree to a loss of 30% of their total amount, as a cost to the WHJ bank. What alternative did they have?
After the contracts were signed, they tried to sell their sims, to find some money to pay all accounts. There was an agreement with LL that Steffen could manage all business that was started by Cris, because this was unusual….an avatar died in RL, with a lot of assets in SL.

This was what we had to believe.

On Friday, June 13^th, what a date, there would be a statement from Steffen, because nobody knew what was happening, how long they had to wait for their money…….

The statement came…..a few days later.

“CLARIFICATION OF CRIS
Cris is very ill and not DEAD. It was certainly not a good idea to let him die in the real World
or in SL, but in the given situation it was the only idea we had to save the islands.
In retrospect, it turned out by the fact that it was no use.
The management knew about this situation, and I am not really happy about it, but the life of my brother
was more important than continuing the game here absurdly. He was no longer able to continue
the business and was so limited; he repeatedly has stayed for a longer time at hospital stays.
Until now, his health condition is critical, and he can hardly do his daily work.”

This announcement, what has happened in the past and what they were trying to achieve, felt like a bomb to all shareholders. Why did they play this comedy? Why didn’t they simply say that Cris was ill, and could no longer work at the bank…?

Is this story the only true one, or is this also a lie?
Although the website is shutting down after today, they still say that the shareholders will be paid.
It doesn’t matter to me, as I had only a few Lindens there, but there others, who are really depending on that money, and who were desperately waiting to see some of their money back.
Well, we knew it all along, before LL closed all the banks, but the way they communicated, seems very much like the Lindens would have done.
At the end of their statement, (I use the plural form as I think it is more than one avatar, or all are one and the same), they wrote: (this was translated from the German language by someone)

“IMPORTANT TO THE END

Responsibility:
The WHJ belonged to ALL shareholders, and not a single person.
The WHJ went bankrupt, and it has enriched NOBODY here, on the contrary,
the responsible persons are now broke in RL LIFE too.
The money flowed into the daily interests and the monthly costs.
Everyone who signed the WHJ has to share responsibility.
NOBODY is guilty, it was simply a failure

The remaining debt:
Even if none likes to hear, but after a bankruptcy, actually none is entitled to money.
Since this is not clearly regulated by LL in SL, we still obliged to repay all./..."

Will this be the end of the story? Will it continue? Will everyone be paid accordingly?

I don’t think there is much hope, but as they use to say; you can not live without hope.;)

Update: New Second Life Policy on inworld "banks"_ some answers

As I was closely watching the developments at WHJ Holdings, I see now that they are almost ready with a solution to follow the rules of Linden Lab.
It will no longer be a bank and all members will be partners, or shareholders. This means they can buy and sell shares only through their website, not inworld. It seems that the majority of their "customers" agree with that policy, except for a few members.
A lot of questions raised by this new policy of Linden lab, not in the least at the current "Second Life banks", but it seems that there are always doors open to other solutions, without having "casualties". The residents are therefore not always screwed by Second Life.;)
But nevertheless, there are many people among us, who are wondering , what is allowed and what not, and will still be suspicious by any other action of a former bank.
On "The Second Life Newspaper" , there is a phone conversation written down with some questions and answers regarding this issue, with Patch of Linden Lab of 1-15-08.

Here we can learn that in general loans still will be permitted, as long as they are not connected to interest, and that the lender will be able to charge a service fee for lending.
The ATM's are being targeted because they are tied to interest bearing accounts, so they will be ok just for depositing in an investment account .

The fact why this new rule had to be set, was only because of the interests, paid by the SL former banks, which were not according LL's point of view regarding the protection of Second Life's economy and its residents, probably inspired under a "virtual" pressure by the US government and other commercial thoughts.....

Update: New Second life Policy on inworld "banks"

As I wrote yesterday, the "Whitfield-Hastings & Jenkins" organisation has now proposed four possible strategies to continue their business. It is up to the customers to decide.
As for now, withdraws are possible, but limited.
It does not seem that this bank will stop their business, without struggle for a "new way of living" ,as they like to call their proposals.
It will be quiet interesting to see how these former banks, will find a way, to keep most of their customers, still stay in business, and most of all, keep up to the new Second Life policy.

New Policy in Second Life regarding in-world “banks”

Linden Lab has found a new way to disappoint some residents after the collapse of Ginko Financial, and other related happenings (casino’s, sploders…..)

From the official Linden Lab blog:

“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. We’re implementing this policy after reviewing Resident complaints, banking activities, and the law, and we’re doing it to protect our Residents and the integrity of our economy.”

Now, to my point of view, it is understandable what they are trying to do, and at least they are giving some time before having this rule effective. Every in-world bank has the chance to make their operations legal, and make their customers aware of the new situation.

I can imagine that every resident, who has money at a bank, will now start to panic, and withdraw all their money, to be sure it is done before January 22nd. But is that possible?

I have learned that the “Whitfield-Hastings & Jenkins” bank has frozen all accounts. This is a security measure from their side, as, when every customer would withdraw their money, the bank would go bankrupt and have no meaning of existence anymore.

“as far as we can see now, the only thing that will happen is, that we will STOP the
"in WORLD ATM´s" and the "in WORLD activities" to match the rules of LL.
This will not mean, that we are stopping business, but we do need the time to
create a system that works for LL and for us and certainly for you.”

All Second Life banks and investment institution are trying to find a way to match the new LL rule, and this morning, there was already some white smoke coming out of the chimney of the Whitfield-Hastings & Jenkins organisation.

“We the WHJ are not going to run away with your money, we will stand here aside you, to show the WORLD and the SL/LL that even this can be managed without letting anyone stand in the rain.”

Later today, they will give some clear answers, how they are going to solve and overcome these unexpected obstacles by Lind Lab.

First Belgian bank in Second Life.

Finally, Belgium has his first bank in Second Life, The Keytrade Bank, that is a part of the Crédit Agricole. Keytrade Bank opened in the virtual world his own island and has an innovative tool to extend their marketing views in SL.

A lot of companies have realized that visual advertising in Second Life does not pay off, but to add some value to their company, you have to offer something else. The Keytrade Bank has found a way to answer this need. They offer to every SL resident a HUD or heads-up display. With this tool you can easily convert Linden Dollars in every known currency.

According to the Sales and Marketing Director, Thibault de Barsy, Second Life users are complaining that all prices of the products are only displayed in Linden Dollars. Until now , users had to do the conversions themselves to find out the real value of goods or services sold in a Second Life shop. Our currency converter now saves users this task, making virtual shopping easier. Moreover, the conversion is carried out in real time in relation to financial market fluctuations, no matter currency chosen.. In the continuity of a spirit of permanent innovation, Keytrade Bank wants to be the first to explore the new territories of a tri-dimensional Web. Therefore, we felt important to provide a tool potentially useful to all present and future users of those virtual worlds. Our island in Second Life is to be considered as a field of experimentation for future products and the proof of our will to be at the cutting edge of web-based financial services.

Besides the conversion, the HUD gives you a permanent range of financial information, coming from Dow Jones Newswires. Finally, there is an information board on the Keytrade island, where you will be able to find the daily fluctuations of the Linden Dollar against all currency of RL.

“The Keytrade bank Belgian’s first 100% Internet bank, explains Thierry Ternier, CEO of Keytrade Bank. We are also the first Belgian Bank to becom e active in Second Life. Ou ambition is to bring real value all over the globe, not only to Belgian residents of this virtual world.”

This project was realized by the agency Emakina and The Bluepillgroup, who has done such a project before, by offering a HUD tool for Belgian Airlines. These companies are giving a lesson to others of how managing marketing tools in Second Life, in a innovative and interactive way.

(Also read on secondlifecrew.be)