EVE Online is a deep sandbox game with the most complex player-driven economy found in any massively multiplayer title. There's enough depth, in fact, that players can establish their own financial ventures in-game, in the forms of bonds and IPOs, and even institutions like banks. However, EVE Online is a game where some players create while others undermine or outright destroy. Trust is a valuable and rare commodity in EVE's setting of New Eden; there are always risks of deception and betrayal. But those willing to take risks are generally the ones who are most successful. Of the player-run banks presently operating in the game, EBANK has billed itself as "the largest financial entity ever seen in EVE."
The secrets of its success? A solid Board of Directors and knowledgeable staff, various safeguards preventing any one individual from accessing all bank assets and, yes, some of that rare commodity called trust.That trust was damaged recently though, when EBANK's (now-former) CEO Ricdic, well-known to the game's playerbase, embezzled the virtual funds he was entrusted with. Although this is permissible by EVE's developers CCP Games, selling in-game currency for real-world cash is not. Ricdic has been banned from the game but his actions triggered a run on the virtual bank, and have shaken the faith many players have in EBANK.
Massively spoke about the incident with LaVista Vista, a former member of the game's Council of Stellar Management who sits on the Board of Directors of this virtual bank in EVE; he also provides commentary and analysis of virtual worlds and EVE on the Eveconomics blog. LaVista told us about the parallels that can be drawn between a banking crisis in the virtual galaxy of New Eden and that of the real world, and how what happens in a game can impact real lives.
In the main thread about the incident on the EVE Online forums, EBANK's chairman estimated that Ricdic embezzled roughly 200 billion ISK, or 8.6% of EBANK's 2.3 trillion ISK in deposits. Now that some days have passed since the theft and there may be a clearer picture of the damage inflicted, does that 200 billion ISK estimate hold true?
We have been quite busy with getting an overview over our total assets and how much he might have taken. Ricdic was our lead teller, and as such was the guy with the overview of all our collateral held. The main thing he got away with was the 200 billion ISK.
Could Ricdic have stolen more than he did, and if so, why *didn't* he?
" The run on the bank had the potential to do great damage to EBANK as people frantically made withdrawals to ensure they would not be caught if the bank ran short."
As for why he didn't, well... It's not exactly a secret anymore that Ricdic breached the EULA by selling the ISK he obtained for real-life money. The fact of the matter is that reality caught up with him, and CCP banned him, before he could sell all of the ISK.
To the best of our knowledge, [Ricdic's] doing so was nothing but a knee-jerk reaction. The information showing that he only stole liquid assets, goes to support that idea. His official claim is that he needed the money to pay off a house, which he couldn't afford after all. Having known Ricdic for over 2 years, I must admit that it's a fairly consistent story. So unless he has fooled us the last 2 years over 200 billion vs. much more, then I think there might be a grain of truth to the story.
What was the extent of the bank run over the following week resulting from this theft? And on that topic, which is worse for EBANK as an entity -- the actual theft or the panic it caused?
The run on the bank has come to about 600 billion ISK, which has been withdrawn. However, we have a very big group of excellent supporters, who have deposited about 105 billion ISK sitting in Sweep to keep us liquid. We are extremely grateful for this. Currently the run seems to be mostly over with only a slightly higher withdrawal rate still, than deposit rate. That's to be expected, and in-line with EBANK's strategy to shrink to a more managable level.
EBANK has always been extremely sound, due to our massive reserves. Our checks and balances have proven themselves to work as a mitigation device and by having the reserves spread out over several directors, the embezzlement was kept to a minimum. However, the run on the bank had the potential to do great damage to EBANK as people frantically made withdrawals to ensure they would not be caught if the bank ran short.
We have also had several offers from very large entities, regarding big loans, should we need to cover any insolvency. Frankly, this has yet to be needed. But we are grateful for the support.
When did you learn about the embezzlement, and were Ricdic's actions the reason for the news update you posted on the EBANK site (on 6/9), stating that there were technical problems?
"Having spent 2 years on this project, real-life money and a lot of sweat and tears, it hurts to see EBANK's name being dragged through the mud, and putting up with the drama."
For a month or so, we had tenative plans to move [the character who accepted deposits] EBANK Ricdic to my account as Ricdic needed to focus more on his family, possibly even leaving EVE. When we talked to Ricdic, he agreed to still go ahead with this. As such, we had EBANK Ricdic remove his roles in-game and such. While this took place, we came to realize that our back-end couldn't deal very well with the character not having full access to the API. So we couldn't possibly keep the API system going through this transition so we disabled it and announced that it was down, and that nobody should send ISK to EBANK Ricdic.
I realize this past week or so has been somewhat chaotic, but what is the broad plan for EBANK moving forward? How much will the operation be scaled down, and what assurances can you offer to players who invest their ISK with EBANK?
At this point, we are working through several items on the table and those discussions will allow us to determine what amount of ISK we are comfortable in managing.
How much that will be, I really can not say at this time. We are redoing checks and balances, making them more well-defined. As always we will establish a cap and not accept new account creations beyond the point of what we, the Directors, deem agreeable levels.