The SL Banking ban - fear and greed
It's said that two of the most prevalent economic forces in the world are fear and greed. Linden Lab's new banking ban has highlighted both of those, in spades.
Linden Lab has absolutely refused to act as a regulator of banking in Second Life in an ongoing fashion, and have therefore chosen to bar the practice entirely, except where operators can prove that they are already regulated by real-world authorities. Not just legal - regulated.
Reactions to this policy are, overall, positive - except for those that operate these unregulated interest-bearing groups, and those who have their money invested in them.
If your RL neighbor put up a counter, and a sign "First Bank of [insert your street name here]" and offered interest on deposits, would you deposit your money with her?
Would you be more or less likely to if she offered interest rates far in excess of your regulated bank? If she wouldn't provide specifics on where that interest came from?
Nonetheless, people flocked to put their money into these banks, many of which have been operating unlawfully for the countries in which they were situated. While there are some jurisdictions where you can hang up a shingle and start trading as a bank, most of them require certification and oversight by regulatory bodies.
Linden Lab has closed the door on the first kind. It's not enough to be lawful of operation - you have to possess regulatory oversight.
Of course there are panic withdrawals right now, because, at the end of the day the depositors simply don't trust the banks to be able to repay the deposits, so everyone wants to get their account completely withdrawn as soon as possible, while the money holds out.
It occurs to us that one or two of the banks will probably put up "Don't panic, we've got everything under control, and we're filing the necessary forms with Linden Lab and will be trading as usual" signs simply to stop depositors from sucking funds out, but will otherwise close down on 22 January with the rest of them taking as much of depositors funds with them as they can.
At the site of JT Financial inworld, protestors gathered with signs. Some blame Linden Lab, some blame JT Financial, and others - well, if there's someone who can be blamed, there's someone doing it. Plus the usual collection of tangential, random and humorous protest signs that gather in any Second Life protest, "Baba Sucks" (a reference to oldbie resident Baba Yamamoto) being among the most prevalent of the outliers.
Some people at the protest were afraid, some confident - most of them were angry though, either at Linden Lab, or at their chosen bank.
Kobe24 Losangeles, one of JT Financial's staff urged calm, and asked users to protest Linden Lab's decision instead of JT. Losangeles asked depositors "When you come for your money at 12PM SLT take only what you need so you can leave some for others. Arbitrage has helped everyone that has had an account with jt, he has never not paid people so you shouldn't worry about this."
Although Losangeles did say that Arbitrage Wise (operator of JT Financial among other organizations) would be unable to fully pay back depositors until May this year. Losangeles also urged users to sign a petition against Linden Lab's bank ban.
What is curious is that JT Financial seems to be the only bank in SL where there is a crowd, let alone an actual protest. Everything's quiet at other locations, though the ATMs at the other locales we visited are likewise locked up. Just being there gave the feel of a stage-managed event. We think the poorly spelled protest signs were actually made by JT Financial staff - it is certainly consistent with the statements that they were giving out at the time.
