METANOMICS SPECIAL PANEL ON LINDEN BANKING POLICY

JANUARY 10, 2008

ONDER: Hello, everyone, and welcome to a special edition of Metanomics, produced by

Clever Zebra in conjunction with Cornell Johnson Graduate School of Management. I’d like

to take a brief moment to thank the sponsors of the Metanomics series. They are Generali

Group, SAP, Kelly Services, Cisco Systems, Sun Microsystems and Saxo Bank, who were

good enough to host today’s event. And of course none of this would be possible without

SLCN, who are the best ones to talk to when it comes to working with video in virtual worlds.

Avatars across the grid at all event partner locations can join the conversation by joining the

Metanomics Group. If you have any questions for our guests today, you can send them

directly to me. My avatar’s name is Onder Skall.

Today’s session of Metanomics is being held to address a radical shift in policy. Linden Lab

has regulated Second Life banks effectively shutting them down until they can change the

way they do business. Our guests today include key figures related to this issue, but

introducing them will be our host, Robert Bloomfield.

BEYERS: Hey, well, thank you very much, Onder, for that introduction, and I’m delighted to

hear that we have a record number of SIMS that have crowds. This is a special event. I

apologize. We’re starting a little bit late, but there were a lot of things to do in a very short

time. I’m just glad I am not running one of the banks affected by this change in Linden

policy, because I know there are a lot of people who have had sleepless nights since

Tuesday.

So I think many people anticipated Linden Lab would eventually take action on unregulated

financial services in Second Life, but the financial community was certainly taken by

surprise on Tuesday when Linden announced that they were going to take action on all

banking activity absent evidence that the financial institution was submitting to Real World

banking regulation from an appropriate body.

At this point it does seem that it’s going to be very rough on the banks. There have been

some runs, reports of stock prices falling, land being listed for sale at fire sale prices. And

there are a lot of questions that we haven’t been able to answer yet, how will this banking

crisis affect the Second Life economy or the experiences of the many users who have found

the financial sector of Second Life to be a source of interest and entertainment, if not profit?

And it’s also not clear how this policy is going to affect the many firms, dozens of firms, that

are issuing equity securities on Second Life exchanges, because all of those exchanges are

tied to banks.

So what we’re going to do in this special session of Metanomics is we are going to get some

insight into the history behind this change in policy and take a look at its short-term and

long-term implications. Before we get into the details, first I would like to thank

Jillian Falconi, who is our host on this Saxo Bank SIM. Jillian, welcome to this special edition

of Metanomics.

JILLIAN: Thank you very much. I would like to welcome everybody present here today and

also thank our employees at Saxo Bank, our Real Life employees, actually, who have

worked, let me say, very, very hard for the last day and a half since we got this invitation. I

really hope that everybody here enjoys it.

BEYERS: Okay. Now, as we get into this session, I would like to encourage everyone who

is listening to join the Metanomics Group in Second Life so that you can participate in the

back-chat channel, and that’s a way that you can get questions to the panelists. So if you

have questions that you would like to hear, then simply type them into the Metanomics

stream, and we will then be able to pass those on to the panelists.

So first I would like to introduce David Talbot. David Talbot is a professional journalist for 20

years. He’s the chief correspondent at Technology Review magazine and a past recipient of

the Overseas Press Club of America’s award for international environmental reporting in any

medium and is also a former Knight Science Journalism fellow at MIT. David, welcome to

Metanomics.

DAVID: Thank you. It’s nice to be here.

BEYERS: Yeah, well, we’re delighted to have you on, in part because some people are

calling you, I guess, the proximate cause for the Linden Lab policy. Technology Review, just

maybe a little more than a week ago, published your article entitled “The Fleecing of the

Avatars.” And I’ve heard several people muse that that it might have been a trigger for

Linden’s announcement on banking. So David, what do you think it was in the article that

caught Linden Lab’s attention?

DAVID: I don’t know if what you say is true, but it certainly seems that you could take their

announcement, to some extent, at face value, that some of these institutions are offering

unsustainably high interest rates and that they are, as Linden Lab put it, in most cases

doomed to collapse. If there’s any truth to that--and I would say there might be--then

certainly they sort of had to do this if there are unregulated financial institutions running that

the deposits in which can be translated into real dollars, the distinction between the virtual

bank and a real one become thinner and thinner.

As to why the article, if it were the trigger, I can only speculate. You’d have to ask them, and

they wouldn’t answer that question when I asked them. But of course they’re not speaking to

anybody. But I don’t know. Maybe the article put a human face on it, and you saw that we

were talking about real people and not cartoon characters running around in what some

people outside of the community might perceive as more of a game than something to take

seriously in terms of its economics. So maybe it put more of a human face on it than

previous efforts had, but I don’t know. I’d be interested in what other people think, because I

just don’t know. What do you think?

BEYERS: Yeah. Well, we’ll hear from our panelists. But one thing I guess I’d be interested

in hearing about from you is--I mean you interviewed a number of people who have

been--so for example, just to mention a few that were in the article, Dan Miller, who is senior

economist of the Joint Economic Committee of the U.S. Congress; Ben Duranske, who is

actually going to be on our panel, and a number of people who are running and investing in

banks. Were you feeling--as you interviewed these people, how would you characterize sort

of the sentiment regarding groups, like in particular Ginko Financial, which closed down a

couple months ago?

DAVID: The sentiment of Ginko Financial is an interesting question because I have no idea

who the real human being is behind Ginko Financial. I’ve had a number of emails back and

forth of various people who I did and didn’t quote in the story and I’ve had emails since the

story appeared from reaction from people.

And I’ve asked, “Well, who is this person, and where are they now? And whatever amount

of money sort of went away, where is that money right now?” And all this is very murky to

me. I think it would be very interesting beyond people’s reactions and however upset or

happy they are about this to get any hard facts about where’s the money and where is the

person that was running this operation?

I don’t know if that answers your questions, but I think that’s sort of where I, as a journalist,

would like to have more information and more facts.

BEYERS: Yeah. Well, let’s see if we can get some more information from Ben Duranske,

who is the second person on our panel that we’ll be hearing from. Welcome to Metanomics,

Ben.

BEN: Thank you for having me, Robert.

BEYERS: Yeah. So Ben is a lawyer who has covered legal issues in Second Life for some

time on his popular virtual world legal blog virtuallyblind.com, and I understand you’re

currently writing a book called “Virtual Law”?

BEN: Yeah. I’ve actually just finished it. It’s due for publication through the American Bar

Association in April.

BEYERS: Okay. That’s fascinating, and I hope you have time to revise it as necessary to

discuss the issues that have just come up this week.

BEN: Yeah, I know that other people are more upset than I am, but I do have to say that

Linden Lab announced this the day after I sent the final draft to my editor, so obviously there

will be some revisions.

BEYERS: Yes, I’m sure you’re a little bit upset. I actually have a similar reaction in the

sense that I had Robin Harper, who is one of the vice presidents at Linden Lab, on my

Metanomics show the day before this announcement. Of course, none of this was

mentioned, and the next thing I know, it’s all over, and I guess I could have had that scoop,

but it didn’t happen.

But anyway, I’m going to read, first of all, the key paragraph that states the policy and, as a

lawyer, I’m interested in hearing your perspective on this. So they say, “As of January 22,

2008, it will be prohibited to offer interest or any direct return on an investment, whether in

Linden dollars 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.”

So can you tell me, just speaking as a lawyer, what do you make of this? Why the details?

Why the focus on interest and direct returns on investments?

BEN: Well, I mean it’s not legal policy. It’s not a law. It’s not a piece of legislation. It’s just a

company’s policy and so parsing it is difficult. We can’t really parse it in light of law. That

said, I actually don’t think that this policy was particularly motivated by legal concerns on the

part of Linden Lab, which I think is something that would surprise some people. I think that

Linden Lab could potentially be sued for what happened with Ginko, particularly in light of

the fact that their CEO is on record as late as early August, as Ginko was collapsing, saying

positive things about it.

BEYERS: I just want to make sure. You mean Philip Rosedale, CEO of Linden Lab, saying

positive things about Ginko.

BEN: I do. I do. Earlier in 2006 he compared it to Micro Lending Institution. It was notable

for its good works. And then in 2007 as it was collapsing he, in an office hour, said that it

was surprisingly transparent. I mean, even people who were sharing the stage with me I

think would say wasn’t true about Ginko. It had almost no transparency. And so I think that

those statements could have exposed Linden Lab to some liability for Ginko.

That said, otherwise I don’t think that they are really exposed to a great deal of liability for

what happens on their grid in this industry. I think that this decision was largely a business

decision because they’ve gotten quite a bit of bad press for reasons that are legal and that I

would analyze later. Most of these institutions aren’t viable and are illegal. And so every

time one of them collapses somebody talks to a reporter and Second Life gets splashed

across the newspapers as a place where fraud occurs and avatars lose money. And I think,

from a business perspective, they got tired of that, and they got rid of the institutions that

were causing those problems.

BEYERS: And so this is really--I guess you could call it a customer service decision more

than anything else?

BEN: I think that’s accurate and I think, if you look at the forums, you see that the vast

majority of Second Life users see the logic in it. Some people have lost money in the short

term. I think our sympathy should go out to depositors who are likely to lose money over the

next two weeks and, to some degree, to bank owners who were permitted to run these

institutions for a very long time by Linden Lab.

That all said, in the long run, I think this is a healthy move for the grid. I think it’s a smart

move on Linden Lab’s part. And while I don’t think that it has much to do with Linden Lab’s

legal exposure, I think it was an intelligent business decision.

BEYERS: Okay. Now that might clarify one of the big questions that I had about this from a

legal perspective, which is that the Lindens on the one hand are saying--I should say Linden

Lab on the one hand is saying Lindens are not money. And, on the other hand, they think

that what they call banking, in quotes, in their policy release is actually some form of

banking, which is odd, because most banks actually rely on real money.

BEN: Let me just briefly comment on that, Robert.

BEYERS: Yes. Yes.

BEN: I think it’s really important for people to realize this, because it’s the number one

argument against the illegality of these operations. It’s the number one argument in favor of

the legality of stock exchanges. Everybody puts a disclaimer on their Web site, saying,

“Look. Linden Lab says that these are just a limited license right. They’re not really money.”

You’ve got to understand that that’s a contract between individual Second Life users and

Second Life. You make an agreement with Second Life that these things that you’re getting

from them aren’t redeemable with Second Life for any value. The contract doesn’t say

they’re not worth anything. And even if the contract said that, two private parties can’t agree

to change the law in a contract. And so if these are actually an item of currency, if they have

value, if they implicate various criminal laws, those laws are going to apply no matter what

the contract with Linden Lab says.

BEYERS: Okay. So let me go on now to our next guest. So on our panel we are delighted

to have Travis Ristow, who represents the BCX Bank in Second Life. Travis, hello.

TRAVIS: Thank you. Hello.

BEYERS: Hi, Travis. So now in real life, first of all, I mention you’re actually from Ionia,

Michigan, and you’re a Spartan fan. Is that right? Michigan State?

TRAVIS: That’s right. Don’t hold it against me.

BEYERS: Yeah, I will not hold that against you too much because Michigan won their last

game of the season. So go Blue. Anyway, now that I’ve gotten that out of the way, one of

the key points of emphasis in Linden Lab’s policy is that the interest rates that banks like

yours are quoting are so high that they’re, in their word, “unsustainable.”

And I have to say the interest rates that your bank quotes are impressive. You’re offering up

to, I guess for the longest-length term deposit, a six-month deposit, you're offering--or were

up until now--offering two and a half percent interest per week. And so my first question to

you is if Linden hadn’t stepped in, how could you have earned the returns that you would

need to pay off depositors?

TRAVIS: Robert, that’s an excellent question, and here’s how I explain it. We would have

earned the money to pay the interest the same way we’ve done it for over a year so far,

investing our money, loaning money, making a return and passing it right on to account

holders in interest, just like real financial institutions do. Linden Lab [lumps?] our rates as

extremely high without ever asking us how we sustain them or even reviewing our business

model, so it’s hard for someone that’s stuck in this Real World mentality to see these rates

as actually possible.

Second Life’s growth rate alone is a fine example. No real country grows at 800 to 1,000

percent a year, except possibly China. A totally different view and rules apply to the growth

within Second Life and Second Life Financial and its entities. We’ve always practiced a

controlled growth, and we spread our investments in collateral-backed loans to protect our

investors and, until Tuesday, that model worked perfectly. In fact, a few months ago, we

actually lowered our interest rate and took considerable heat from the entire financial sector

at the time for doing so. But we did it because we wanted to make sure that we remain

viable.

DAVID: May I ask a quick question? This is Dave Talbot.

BEYERS: Yes, Dave, please.

DAVID: Will the gentleman who’s speaking, will your depositors be able to get all their

money out now?

TRAVIS: Yes, they will. Yeah, they won’t get it right now because obviously we have this

money invested, and right now the stock market and the land market and actually trying to

call all of the loans that we’ve got out would be detrimental. But yes, we will be refunding

every cent of our depositors’ money.

BEYERS: So I guess what you’re hoping for is an orderly liquidation of your assets as

needed. How long do you think that that’s going to take?

TRAVIS: That I cannot say exactly right at this moment. But what we do have is we have a

couple of plans in places that we can infuse capital of our own and from a couple of private

investors to go ahead and help with short-term liquidity and possibly actually making sure

that all of the depositors are paid off right then. And then we will be taking the investments

that we have and continuing to allow them to collect interest and make a profit.

BEYERS: And just for some context, Travis--

DAVID: Why will you be able to do that, but Ginko wasn’t? If I may just cut in. I’m just

curious about that.

INTLIBBER: Actually, I’d like to answer that question.

TRAVIS: I would love to answer that question.

INTLIBBER: I could answer that question for David very easily.

DAVID: The fact of the matter is that, in contrast to Ginko, we actually have a business

model that works. And I’m not going to go into all of the logistics or the hearsay of what I’ve

heard about Ginko. The fact of the matter is that our bank--if that’s what you want to call it at

this point--has been viable since we started it. The interest rates that we charge are quite

excessive in terms of Real Life, but then again so are the interest rates that we pay out.

That has allowed us to make at least a few hundred thousand Lindens over all of our

expenses and our interest. That’s why we would be able to. We have all of our assets in-

world. We do not take anything out-of-world. We have never taken it out-of-world. So I mean

we just have the assets to back us.

BEYERS: Okay. Now, I believe that was Intlibber who also wanted to address that

question. Is that correct?

INTLIBBER: Yeah, I can address that very simply.

BEYERS: So first let me just give you a quick introduction. This is Intlibber Brautigan--

Michael Lorrey--who’s the CEO of Ancapistan Capital Exchange, which I guess you have a

banking arm, but also you are running a stock exchange with firms, both banks and

non-banks listed on it. Is that correct?

INTLIBBER: The ACE Exchange is a subsidiary of B&T Holdings. B&T Financial is another

subsidiary. They’re completely separate from each other. The ACE Exchange does not have

any listed banks. The only financial institution there of any type is SL Risk, and that’s

actually oriented towards doing risk analysis services for financial institutions in terms of

credit ratings and scoring of avatars’ financial histories. So no, we don’t have any listed

banks on our exchange.

The ACE Exchange does not pay any interest on deposits because it’s an exchange, it’s not

a bank. We don’t play games with our depositors’ money. It’s their money. We want them to

invest it how they want to do it. That’s their freedom. It’s their property.

Our B&T Financial was originally a bank called My Second Bank, which had grown

alongside B&T. They had financed a lot of our expansion, not all of it. Only right now it’s--

essentially the liabilities of B&T Financial is about ten percent of the asset value of B&T

Holdings as a whole, so in the event that we have to resolve all deposit liabilities, we’re

going to have no trouble doing that either.

Now, as for the question regarding Ginko, two factors involved in why Ginko went down.

Number one, a majority of the deposits in Ginko were invested in Real World investment.

Nicholas Portocarrero invested it in some sort of a Brazilian telecom project, which it has not

completed and is not making money yet. And that’s all I know about that side of things.

He had about 40 million Lindens invested in World of the 200 million of total deposits. And

some of that was in B&T; more of that was in Hope Capital, which owns World Stock

Exchange, and in other stocks on the World Stock Exchange. And all those stocks on the

World Stock Exchange have been seized by LukeConnell Vandervere. And we have put the

B&T stock, as well as one SIM in our estate that Ginko had owned, we had put in the

custody of Sean Altman for a Ginko resolution trust to help get assets back to the Ginko

bondholders.

The reason Ginko went down, besides their bad business model, was it’s directly the fault of

Linden Lab itself. Linden Lab outlawed wagering without any warning or heads-up for

people to prepare to modify their financial operations whatsoever. Ginko had their ATMs in

just about every casino in SL. And as soon as wagering was outlawed by Linden Lab, all the

casino owners drained their accounts overnight, and their reserves went to zero. They could

not keep ahead of withdrawal requests, and they had to convert to [bonds?]. That’s why

they went down. The direct cause is Linden Lab acting like a tyrannical government messing

with the SL economy.

BEYERS: Ben, I was thinking that you would want to respond to that, so take it away.

BEN: Well, I think that what Linden Lab said in their press release on this policy was

actually what caused Ginko’s collapse, and that’s that it was doomed to collapse from the

beginning. And I think that whenever we hold one of these events or whenever we interview

somebody who’s running one of these institutions, there is a different story about what went

wrong with Ginko. It being invested in a Brazilian telecom is one that I hadn’t heard before.

But we know from the person who ran it that they were paying themselves between $1,000

and $2,000 U.S. dollars a month in salary. And so that’s where some of the money went.

I’m concerned that similar things are true of a great number of Second Life banks, and I

think Linden Lab was too. It may not be true about the banks that are owned by the

gentleman with whom I’m sharing the stage, and I hope it’s not. You know, they seem like

nice guys. But the reality is that almost all Second Life banks are insolvent from their

inception, and they are because they offer extraordinarily high interest rates, and they don’t

have investments that make that level of interest.

INTLIBBER: You don’t have any basis to base that charge on.

BEN: Let me throw out a couple of numbers. I mean, these are numbers that come from

Travis’s bank. At this point you can get 2.5 percent a week, which works out, assuming--is

that compounded weekly, Travis?

TRAVIS: Yes. Yes, it is.

BEN: I mean if that’s compounded weekly, that’s 361 percent a year interest. In other

words, if I give you a $100 today, I should expect to get $361 back on January 10.

INTLIBBER: That’s right.

BEN: Now, you’ve got to invests--making 361 percent a year. When this bank started--and

I’ve got the reference for this; I’ll throw in a backchat when I’m done. It’s on the Web

archive--you were offering 6.75 percent a week interest. That’s 2,986 percent interest. And

you charge a lot for loans, but you charge 11 to 25 percent a year as interest on loans. I

mean the different is just staggering.

TRAVIS: No. No, that is incorrect. That is incorrect. We charge 11 to 18 percent--

BEN: That’s a weekly--

TRAVIS: --weekly.

BEN: 6.75 percent a week. Let me throw the reference in backchat right now. It’s on the

Web archive. You offered 6.75 percent a week, which is almost--

TRAVIS: No, I’m not disputing that. I’m not disputing that. What I am disputing is the 11 to

18 percent per year.

BEN: On the loans.

TRAVIS: Our rates on our loans are between 11--and actually, now, 21 percent weekly.

Weekly.

BEYERS: So Ben, that’s weekly, right?

BEN: Oh, I understand. All right. All right.

TRAVIS: We are covering almost 14 depositors at the same Linden Dollar amount on one

loan.

BEN: I understand. All right. All right. Then let me just ask this then. It very much relates to

this. I mean if that’s the level that you’re doing you obviously have to be relying on those

loans coming back in at a fairly high rate of return. And you’re comfortable that that’s going

on with your bank?

TRAVIS: Yes, because 99 percent of the time our loans are backed by land, and we do--

BEN: That’s fantastic. That’s fantastic. And this is a really good example. That’s exactly

why I said I really hope--and I believe to some degree that the gentlemen I’m sharing the

stage with are on the up and up. They’ve got their names on their Web sites; they’re very

straightforward.

But I’ve said--and I think is where many of us would agree--I think that these banks have

brought you guys down and largely caused this problem. A lot of banks in Second Life are

insolvent from their inception. They simply can’t pay the returns that they’re saying that

they’re going to be able to pay.

INTLIBBER: The problem with that kind of assertion--this is Intlibber here--is that the

economy of Second Life grew in the past year at over 1,000 percent.

BEN: Oh, and if they’re relying on more and more people getting their money, that makes a

lot of sense, but that’s what illegal.

INTLIBBER: Let me finish. Offering 300 percent interest on a deposit is actually extremely

miserly of any SL bank. And less than that--like B&T Financial was paying 44 percent

annual, compounded--was extremely miserly compared to the economic growth.

Now, in the real world, the Real World banks, the Federal Reserve and your local banks

base their interest rates on a couple things: economic growth, inflation rate, unemployment

and the level of debt to savings. Those are the primary things that are involved in the central

banks and local banks determining what interest rates are. And the fact is is that Real World

interest rates are one percent or two percent or half a percent, because economic growth in

the real world sucks, to put it bluntly. Okay?

BEN: That all makes sense, except we’re not relying here on investments and increasing

value in investments. For the most part we’re relying on people who are depositing more

money later. Not in your banks necessarily, but I mean you guys can’t possibly disagree that

Joe Schmo’s Bank of Whatever, who isn’t tied to anything and who’s got three ATMs and

who’s been taking in money and that crashed a month and a half after it started, didn’t crash

for exactly that reason. I applaud you guys for your openness, and I actually think that you

probably have two of the better institutions in Second Life.

That said, there are a lot of them that strike me as absolute frauds from the get-go, and I

think that’s why Linden banned this policy.

TRAVIS: And I do agree with that. I agree with--and not just in the financial segment, but

we’re talking all of Second Life. It goes right to your estate owners and everything that

they’re--

BEN: Empty box scams. There’s fraudulent land transfers. There’s so many different ways

that people are screwing each other. But I think--like Linden Lab just picked one that was

obvious, and they got them some press.

BEYERS: I’d like to continue picking up on the argument that Intlibber presented, which is

basically that there’s so much growth in this economy. And actually both Travis and Intlibber

have made this point. There’s so much growth in this economy that high interest rates are

reasonable. That might make sense if this economy were truly isolated from the Real World

economy.

But what I’m trying to figure out is when I look at these, you know, let’s talk about the eight

percent weekly interest on a loan, which is so vastly higher, I feel like we’re talking on the

borderline organized crime rates here where someone’s going to come by and kneecap you.

So my question is, just from a business perspective, why are your customers coming to you

to borrow Lindens rather than simply using a credit card and paying 18 percent per year?

INTLIBBER: That’s actually rather easy to answer. Number one, a lot of people--

BEYERS: This is Intlibber, right?

INTLIBBER: This is Intlibber. Sorry. Yeah. A lot of people in Second Life, number one, don’t

have payment info on file. If they do, they don’t want their SL transactions to be part of their

credit history. Number three, they may be in countries where it’s very difficult to get money

in-world. I know outside of the U.S. the only way to get money into PayPal is if you have a

business account, and a lot of people don’t have that. I’ve run into that with Brazilians, with

Europeans, you name it. People that are not in the U.S. have a lot of trouble getting money

in-world. And even those who have that capability, the amount is limited to a certain amount.

So if they want to engage in any kind of business, they have a serious barrier to entry in

getting capital in-world unless they can use in-world capital markets.

BEYERS: So basically there is a boundary. It really is a separate economy then, in your

eyes, because of these—

[CROSSTALK]

INTLIBBER: Well, it’s a [semi-set?]--

BEYERS: Transaction. Transaction.

INTLIBBER: Yeah. There are barriers to entry. There are also people who are in the U.S.

who, whether they want to keep their privacy, or maybe they’re young and they don’t have a

credit history. They don’t have a credit card. Maybe their credit stinks in the real world,

maybe due to no fault of their own, someone who’s medically bankrupt or whatever. And the

thing is, people come into SL for a fresh start and they try to make a new life, and this is why

it’s a second life because you can come in, and you can be whatever you want to be. You

can create your own reality, and you can create a life and even a business in here and

make your living.

There’s over 50,000 people in SL who have positive Linden flow, which means they make

part of their income here in SL, whether it’s as little as $10 a month, up to over $5,000 a

month. There’s a ton of people who make their livings here, and a lot of those people I

would wager could not make their living in the real world, and that’s why they’re making their

living here.

BEYERS: Okay. This is Rob again. Let me follow up with a question to our two bankers,

which is--well, actually, you know what? Ben, do you have any more responses to what

they’re saying? Do you feel more satisfied that these interest rates are reasonable?

BEN: Yeah. I mean I think it’s really important to draw a distinction between a business

that’s making what it’s doing relatively clear. And I mean while I’d look at these two

businesses, and I did some looking at them over the last day or two, and I’ve been on a

panel with these guys. There’s a balance sheet up on BCX, and I think there’s some

problems with it. But generally they’re trying to disclose some information. They’re clearly

making a lot of interest. I mean it’s on the balance sheet. They’re clearly making a lot of

interest. And now that Travis explains where it comes from, I’m kind of shocked that you can

charge three or 4,000 percent a year interest and get it but, if it’s working, terrific.

That said, I think the bigger picture is that there are 35 bankers who aren’t up on this stage,

a lot of whom don’t have this information available and, as I’ve said, the vast majority of

whom, in my mind, are doing something that prosecutable as wire fraud in the United

States.

BEYERS: Yeah. Well, let me ask you another legal question, Ben, which is: I don’t know

much about usury laws, but I do know that there are limits on how much interest you can

charge. Do you see any potential problems there?

BEN: Yeah. I do think that’s a problem. It’s considered usury to charge an extraordinarily

high amount of interest and I think that if anybody started looking into that, they might have

some problems with it. But that’s probably 15th on the scrutiny list at this point. The bigger

problem is the people who are just outright stealing the money. That said, I thought it was

interesting that Travis was referring to how people can make real money in this, and of

course, Linden Lab does too. It says, “You can make real money. That’s right. Real money.”

And that’s in bold on the Web site. I guess I’d ask Intlibber to respond to Travis’s point: Is it

real money?

INTLIBBER: Well, that’s a good question. Linden Lab says it’s not real money. At least

that’s what Ginsu said a month ago before I was on Metanomics the first time. He was

saying that it’s a licensed product. Well, if it’s a licensed product, then they can’t insist that

we have banking charters. I mean that would be like saying, “Jillian, you’re there in

Denmark. You’re a banker in the Real World. So if I got elected to the Danish government

and I got a law passed saying that someone who pays people for the privilege of storing,

let’s say, fish, has to have a banking charter to pay people for the privilege of storing fish,”

what would you say to that sort of a law?

JILLIAN: I must say that would be a very funny one. But at the end of the day we can say

that the Linden dollar is not real money. But we all know that we change real U.S. dollars, or

we change real Danish kronas to Linden dollars. So when the money is not there, we leave

the avatar and the real person comes out saying, “Hey, where is my money? Where did it

go?” And these people want their money back.

So the main problem with banks and stock exchanges in Second Life is that, if you compare

just regulation, in general, of a Real Life bank, yes, you have a balance sheet out, but you

don’t have any clear organizations that are properly controlling these organizations and

making sure that, indeed, they’re not paying themselves off amazing salaries and using the

monies for the wrong purposes.

INTLIBBER: As many people know, I’ve been trying to get going on at least the stock

market level of things, and we had a lot of resistance in some areas.

BEYERS: Now, this is Intlibber, right?

INTLIBBER: Right. Yeah. And I agree with Jillian on that, that there does need to be

oversight. The problem is the people doing the oversight need to operate from the context of

the in-world economy and in light of the in-world culture and not applying Real World

standards to our economy here in SL because the economy is extremely different from the

Real World economy. We are essentially an almost pure information economy. And

anybody who’s studied concepts of accelerating growth, particularly in the area of

economics, whether it’s Ray Kurzweil or Vernor Vinge or others in that area, it’s rather clear

that without such limitations, such a geography or natural resources or energy or manpower

or other things that limit our ability in the Real World to have greater economic growth, don’t

exist in SL. The only scarce resource in SL is our creativity. And that’s the only thing that

prevents the economic growth from being higher than the 1,000 percent a year that it’s been

over the past year.

And so when Linden Lab says that a 300 percent or a 44 percent or 20 percent or whatever

percent interest rate is unsustainable, what they’re really saying is that the SL economy

itself is unsustainable because people are not creative. And, beyond that, they are

predicting their own demise if they feel that the SL economy is not sustainable anything over

zero percent interest.

BEYERS: Well, now, that’s one perspective. This is Rob again. That’s one perspective,

which is that they’re truly concerned about the levels of interest that investors are being

promised. But if you read the details, not just of the policy but also of the FAQ, you know

what they emphasize. And let me just read this first paragraph again. The first part of the

sentence they say, “It will be prohibited to offer interest--which is underlined, so Linden

Lab’s emphasis--it will be prohibited to offer interest or any direct return on an investment

from any object.”

BEN: That’s another laughable policy.

BEYERS: Well, yeah. Intlibber and I talked a little about this before the session, that there

have been religious bodies before, including the Pope and the Islamic imams who have

done things like outlaw interest. Actually there are even Wall Street Journal articles that

discuss how new financial engineers are essentially working around the restrictions of

Sharia that are saying that you cannot offer interest.

So if we just look at this as a problem with contract structuring, that they’re saying basically

you cannot promise a certain return of a fixed amount of interest above zero percent, now I

guess the question that I have for the people who are running the banks, and also for you,

Ben, as a lawyer, is how closely is it going to be possible for these institutions to simulate

what they’re doing now while not violating the policy simply by offering, for example, a

share, a participation in income, some form of dividend?

So I guess first, to the bankers--Travis, actually let me start with you because you’re solely a

banking operation. What is your plan? Are you considering a direction along those lines?

TRAVIS: Actually, we’ve got about four directions that we’re looking at right now. We’ve

actually been contacted by two Real Life banks, and we are working with them. We don’t

know exactly where we’re going with that because there is a lot involved in that.

BEYERS: Oh, so you’re actually thinking of then taking the direction of getting that Real

World regulatory oversight?

TRAVIS: We are considering--

BEYERS: Perhaps through a buyout?

TRAVIS: Yeah. Well, no, not perhaps--through a buyout. We would work in partnership. But

the fact of the matter here is we are not sure if that is the direction that we’re going to take

because of the regulations that are involved. Obviously we would have to change our entire

business model because we can’t charge 2.5, 5, 10, 15 percent per week. I mean it’s no

longer feasible.

And then you run into a few problems with whose jurisdiction will it actually be, then? Will it

be U.S. usury laws? Will it be Africa’s usury laws? I don’t know. And the documentation that

we would have to provide and the information that we’d have to collect, that all becomes

fairly prohibitive. So it’s something that we are talking about, but we have not decided on a

precise path right now.

BEYERS: Okay. And now the other direction would be presumably to not offer interest and

deal with their policy by not being--what? Are you considering the dividend model or profit

sharing or mutual organization model?

TRAVIS: Yes, we are.

BEYERS: And is your concern that that would still be viewed under the terms of the policy

as it’s unacceptable, or just you’re not sure quite how to make that work?

TRAVIS: Well, actually I do have an opinion, and it is just that. It’s an opinion. But my

opinion would be this: Is that if there are problems, if Linden Labs, in the crux of the

statement, is that the interest rates are unsustainable, if we have actual profit and we are

only turning that over in a dividend, be it putting everything on an exchange or something

like that, if we are only turning over exactly what we have earned, then it’s no longer an

unsustainable thing; it’s backed by the money right there.

So I mean obviously this hit us pretty hard and pretty fast. They could have given us even

five minutes’ notice, and we could have done a lot. But we are right now just really

considering all of our options. Like I said, we’ve had about four decent options including,

actually, some of our own customers that have decided, “Hey, how about if we just give you

the money, and you can go ahead and be totally liquid, and we will work with the rest of it at

a later date?”

BEYERS: Okay. Let’s see. Ben, what is your take on that type of response? Do you think

that has muscle?

BEN: Yeah. I mean I think that the first idea that was discussed, which is that some of these

banks that have, to some degree, an established track record, may well be able to establish

a partnership with a Real Life bank and piggybank on a banking license. It solves a lot of

their problems but also, of course, subjects them to Real Life scrutiny. And I think that, you

know, my personal opinion, and I’ve made this clear for a while is that when you’re talking

about an offer where people can make real money, you’re going to be scrutinized in Real

Life, and so that may be the solution.

The other possibilities, one that was mentioned is essentially creating shares of stock in

something and giving dividends as a result of share ownership. I think that that’s,

unfortunately perhaps for my other colleague on the panel, Intlibber, I think that’s going to

be on Linden Lab’s radar screen next. And I think that there are real questions as to whether

or not these stock exchanges violate securities laws. And I would not be at all surprised to

see this as a shot across the bow of the stock exchanges. I don’t know. Obviously I have no

inside information, but I would question the idea of converting a bank into a share-granting

institution because I don’t think that’s probably going to last a terribly long time either.

DAVID: Robert, this is Dave Talbot. I have to sign off in about ten minutes. Is there anything

else you wanted to cover with me?

BEYERS: Well, do you have responses to what you’ve heard so far?

DAVID: Oh, it’s very interesting. I still would like to know who was Ginko and where is that

money? That was the question I posed at the beginning. Who is this person, exactly? You

guys are all stepping up and speaking out, but I don’t know who that person is or where that

money went, so that would still be very interesting to me. The whole thing has been very

interesting. I have nothing really to add to it, but if anybody has questions for me or wants

me to participate in some way, let me know.

BEYERS: Well, I’m delighted that you were able to participate. I think maybe some other--

actually, I’d just as soon not spend too much time on Ginko right now just because we have

some other topics I’m hoping to cover. Go ahead.

DAVID: You had me on because I wrote that story and if there was questions anybody had

or anybody wanted to add something pertaining to that, I’d be more than happy to step in. Is

there anything more you wanted to discuss pertaining to that?

BEN: Could I ask David a question?

BEYERS: Yeah, absolutely.

BEN: Could I ask David a question? David, I wonder what you found the impact from these

people, if you followed up with them since then or even at the end of the article, was. Are

these people who you talked to who lost hundreds of dollars to Ginko going to remain

involved in Second Life and continue contributing content driving the economy forward, or

are they so turned off by it that they’re leaving?

DAVID: I think it was a mix of both. I mean I think now they’re gun shy, but they’re definitely

not quitting. They’re just a lot more sort of careful and circumspect about what they do and

very wary of banks, which isn’t surprising. But I wouldn’t say that they’ve checked out of the

system; they’re just a lot more wary. That was my impression from them.

BEYERS: Yeah, well, that’s an interesting answer given the opinion, Ben, that you were

expressing earlier that you view this as a business move that basically is going to help keep

customers happy and retain them and keep contributing to the Linden Lab Second Life

community.

DAVID: It would be interesting to ask them--I haven’t had a chance to ask them what their

reaction is to this move. I suspect, based on conversations I had with them, that they would

be pleased and feel that it was appropriate. Of course, they may not feel that way. I

shouldn’t purport to speak for them, but that would be my guess. And looking at the postings

underneath the announcement, there was quite a bit of relief expressed by a lot of people, it

seemed to me.

BEYERS: So I hope that you will be able to follow up with some of those people and maybe

give us some insights on how the people that you interviewed for that article are reacting.

And I think also, speaking for the financial community, we hope that you’ll let us read

whatever article you’re going to write in Technology Review so we can determine whether

we want to give you permission to publish it in Technology Review and [goad?] Linden Lab

into banning the next activity.

DAVID: Well, maybe Linden Lab will ban all journalism by me or others now. Who knows?

BEYERS: Only the bad stuff. Only the bad stuff. Thank you.

DAVID: Well, I guess I’ll sign off now, unless there’s anything else anybody wanted to ask.

BEYERS: Thank you so much for participating, David.

DAVID: Well, it’s been very interesting. Thank you very much, and thank you for choosing

such a good-looking avatar.

BEYERS: Our pleasure.

DAVID: Bye, everybody. Feel free to email me at the magazine if anybody wants to throw a

comment my way or send along any information. I’ll be more than happy to take a look or

answer what you have, any questions.

BEYERS: Wonderful.

DAVID: Thank you, everybody.

BEYERS: I would like to move on and pursue that question a little further on the question of

the stock exchanges. And in particular, this is for you, Intlibber, because you run one of the

major exchanges in Second Life, and so I’d be interested in hearing what changes you

anticipate making and how you think. You know, do you worry, as Ben does, that you’re

next?

INTLIBBER: Well, because ACE doesn’t provide interest on deposits, then we don’t have

any problems with this current policy, other than philosophically. As for companies paying

dividends, that doesn’t fall under the policy for the simple fact that the whole group system

in SL, which people do a lot of their land ownership and other interactions over, the group

system pays dividends as well. So we don’t think that dividends are going to be an issue

with Linden Lab.

Now, in terms of Real Life regulation, as we had discussed in the previous show I was on,

the in-world exchanges are so small in terms of capitalization that they are clearly falling

within the realm of what’s called the microcap exchange which, under the SEC, is

unregulated, unlicensed, and it’s very low degree of oversight on any microcap-listed

company, the pink sheets and whatever you have for a similar type of mechanism in other

countries, those types of companies they don’t have the sort of oversight and regulation that

most people are used to.

When the average man on the street thinks about stock exchanges, they’re thinking about

New York Stock Exchange and NASDAQ, AMEX, that sort of thing, which have a high

degree of oversight and regulation because they have such a large amount of capitalization.

Companies worth billions and billions of dollars is a far, far cry from a company that has

capitalized at the equivalent of a few thousand U.S. dollars.

BEN: This is Ben. I agree with that. I want to comment and ask you this because I think you

probably know more about the pink sheet stuff than I do, but I know that they do have a

certain amount of regulation that is associated with those. Are you aware of any of the other

stock exchanges that are following even that minimum level of information gathering or

attention and reporting at this point?

INTLIBBER: Well, I had founded the SL Exchange Commission, as many people are

aware, originally because of my concerns about oversight at the World Stock Exchange

when I was a director there. And we essentially founded our own stock exchange at ACE

because of shortcomings we saw in other exchanges. However, a number of the

exchanges, whether they belong to the SL Exchange Commission or not, have generally

stepped up to the plate and adopted a lot of the measures that the SLEC has adopted in the

interest of increasing transparency and that sort of thing. For example, the SLEC came up

with its model reporting standard and, as a result, all the exchanges now require their listed

companies to file financial statements on a monthly or quarterly basis, and that’s something

that we stand for and I know that CAPX does as well and VISTX and so on and so forth.

So all of the exchanges are doing their best to follow what the SLEC is doing, and I think a

lot of Real World regulators are looking at what the SLEC is doing and hope that it continues

and that the exchanges continue to follow the standards that it adopts, especially looking at

what’s going on with the World Stock Exchange. I shouldn’t comment on that personally,

and it’s too bad we don’t have T.J. Souza here. He’s the chairman of the SLEC. But the

more the exchanges in-world cooperate with the SL Exchange Commission the less we’re

going to have to worry about this sort of a rule coming down on the exchanges in the future.

BEYERS: Okay. Let’s see. Jillian, you are the one representative of a real regulated bank

here on the panel, and it strikes me that this policy is going to have, potentially, a couple

positive effects for you because Linden has effectively eliminated some competition and

encouraged banks, like for example BCX, to talk about partnering with you.

Obviously this isn’t going to be a decision you personally would make, but do you think

there’s much appetite in an organization like Saxo to jump in and get involved now that

maybe the market has been opened up a little with greater advantages to someone who

already has regulatory oversight?

JILLIAN: Well, I would say I guess we are one of the few people that, when we heard about

this new change, well, we must admit that we were rather happy because, no matter what, it

opens a lot of doors for organizations like us. The one thing I would like to point out, though,

is that, as you may already know, we are not a conventional bank in the sense that we’re

offering current accounts and services such as the one that BCX is offering to avatars in-

world. You would be able to compare us more with--I would almost say, for example, the

services of the stock exchange as Intlibber, since clients what they do is basically invest in

markets as well such as stocks, foreign exchange, futures and so on. So in that sense you

could say it’s a different market.

But, yes, I definitely see the possibility because, as I mentioned to you before, I do see a lot

of potential in these stock exchanges in-world because it is an environment where people

that might be risk averse can come and really understand what trading is, how it works,

what one needs to know to be able to be a good trader. And basically, as they develop their

skills in-world, they then become more comfortable traders and then might feel comfortable

enough to go from an account in Linden dollars to, let’s say, a $10,000 account trading in

Real Life stocks. Not everybody has the guts to, let’s say, start in the big leagues

immediately, so this is a very good starting point to learn about what trading is. And in that

sense I think definitely eventual partnerships could be interesting for us.

And also because there is a demand for virtual investment products, it is for us also a new

opportunity to start looking again to what is possible to eventually offer, yeah, those that

want to trade Linden related, Second Life related products. I--

BEYERS: Go ahead.

JILLIAN: Yes. I also wanted to comment one thing, because I mean the idea of a

partnership as such is very interested, but as we’ve all been discussing for the last hour, this

is all a matter of trust. What happened is that people have been robbed, and people stopped

believing in the whole banking system of SL. And basically what we as a real bank do, then,

to maintain the trust is basically that we guarantee our customers that, let’s say, in case of

bankruptcy, they will be guaranteed up to, in our case at least, up to 40,000 euros back.

To do this, we need the real information on these customers. We need all their Real Life

details and, if people really want, let’s say, a well running banking system in Second Life,

that also means that they need to separate the avatar from the human being because the

avatar is the one that has the experiences in-world while, at the end of the day, we can say

that there are some people that just earn money by being in Second Life by camping, by

working and so on. But this money, the majority of it was injected by a credit card, and we

all know that at the end of the day, yeah, what basically runs the economy are the people

basically paying their memberships every month, are the people spending money to build

every month and so on.

BEYERS: Okay. I should mention that when you were talking about the educational

benefits of being able to trade for relatively small amounts of money in Second Life, in the

policy there actually is a specific exclusion for companies that otherwise would fall under the

purview of the policy but have educational or other appropriate nonprofit goals. So that

might also be something that groups could consider.

Okay. So we’re just about out of time now. What I would like to do, just as we close the

panel, is just talk about a couple issues just to wrap this up, and I’ll let the panelists weigh in

on either one or both as they care to.

The first one is how do you see this policy affecting the long-term growth of the Second Life

economy? And the second one is what sort of marks would you give Linden Lab for the way

in which they implemented this policy? So whether or not you agree with the policy--and let

me just actually quote from something I wrote in the academic blog Terra Nova on Tuesday.

I wrote as a prediction, “Linden Lab--well, let me say actually I wrote one that I didn’t think

there would have much effect on the economy because banking, unlike the Real World, isn’t

really that crucial to the functioning of our economy in Second Life. And second, as far as

the process, I wrote, “Linden Lab will be blamed for acting precipitously, waiting too long,

not telling anybody about the policy in advance, telling a ‘feted inner core’ about the policy in

advance, not giving enough lead time, being autocratic, and ignoring resident desires, and

they’ll also be praised for giving plenty of lead time, acting quickly, being patient, and being

responsive to resident desires.” And actually I’ve heard just about everything that I’ve listed

there. I’ve heard just about everything advanced by someone. So anyone who wants to

weigh in on either of these points, the economy or the process, just let me know.

INTLIBBER: Sure. Intlibber here. I’d like to weigh in on it.

BEYERS: Intlibber, you want to start?

INTLIBBER: Yeah.

BEYERS: Okay.

INTLIBBER: If you look at history, essentially the SL economy, prior to the rise of the capital

markets, operated essentially like the medieval economy. You had guilds. You had peat

craftsmen. You had people who were buying and selling product, but there was no real way

for people to invest their saved capital, and people were generally expected to donate it to

the church rather than save it up or try to invest it in things. Some people did. The

merchants and other traders did. And the Church tried to outlaw interest at that time, and

the merchants responded by enacting a set of three contracts called the Contractum Trinius,

which basically replicated all the characteristics of providing interest and deposit coverage,

and the Church could not eliminate any of those three contracts without destroying the

existing economy, and they networked around the Catholic Church then, and I think that it’s

going to be inevitable that people are going to network around what Linden Lab is doing.

That being said, if Linden Lab acts any more stringently in trying to interfere with the

economy--now, the banking crisis is something of their own creation, and now they’re

making it worse with stupid decisions. You’ve got lawyers making the sort of decisions that

economists should be making. And if things continue this way, the SL economy is going to

be going backward quite a bit. It’s too bad, and things are going to need to change. And I

also happen to think that this policy happens to be a big reason why Cory Linden is no

longer with Linden Lab. He invented the Linden dollar and the concept of owning property in

SL. And I think that it’s too bad that he’s not here, and I think that this is one of the results of

that resignation.

BEN: Ben. And I have a slightly different perspective.

BEYERS: Yeah, I was going to say I heard the word “lawyer” in there so I figured that we

would want to hear from you next.

BEN: Well, that’s fine. On that particular point, I actually agree with him. I think that these

are economic decisions, and they should be made by economists, not lawyers. That said, I

don’t think that this was entirely an economic decision.

Well, we’ve all talked about this, and I didn’t hear a whole lot of disagreement from anybody

on the panel, with the idea that while some of these businesses are legitimate it is

unfortunate that they’re being hurt by this. A great number, perhaps the vast majority of

these businesses are not legal. They’re fraudulent enterprises. So I guess I look back at

history, and I see this more as a situation where we moved from a craftsman/

barter economy in the Middle Ages to a craftsman/barter economy with loan sharks. And

that didn’t impress me. So I think this was a good policy. I think that the long-term effect of

this policy will be that banks that are running legitimate operations and moving money in

and out of Second Life in a legitimate way will either find partnerships or they’ll find another

line of business that doesn’t violate this policy. I think, in the long run, there will be banking. I

think that the banks will get licenses. I think the grid will have a healthy banking economy. I

don’t think it did before.

In terms of grading Linden Lab on this policy, I give them a C plus, I guess. I feel like it was

too long in coming but, in the long run, it’s good for the economy as a whole. I think it’s

relatively clear compared to some of their policies, and I think that’s probably because, well,

the gentleman’s name on the top of it is an attorney, and I think that this definitely did come

from the legal department.

BEYERS: Okay. Travis, you want to weigh in on either the economic effects, or the

process?

TRAVIS: Absolutely. Actually, on both of them. First off, I truly don’t agree with policies put

in place to protect residents. That is great. The problem that I did have was the way that it

was implemented and actually the wording that they used. They used very ambiguous

statements which, in my opinion, fueled a run on banks. Period. And I don’t care who you

are, if you owned a bank, you did have a run.

So it was more on implementation, I guess, than anything else. But I have a deeper concern

about what actually does come next. If banks are regulated, then when are realtors going to

have to be regulated? Educators have to be regulated, all be licensed, whatever, that’s

something that I see as a problem.

So aside from that, as far as are banks absolutely necessary? I don’t think so. I mean I

really don’t think they are absolutely necessary, but I do think they do serve a purpose and if

they are run legitimately and if they are run with a real business plan and profit model, that

they are actually a benefit to this economy. I mean there are a lot of people that would not

have been able--and I understand not a lot of people if you’re looking at several million

users, but I’m talking in my little part of the world, there are a lot of people that were able to

buy land, pay off that land. They have land of their own. They were able to start businesses

and stuff that really wouldn’t have been possible because of other limitations they have,

whether it be what country they’re from, how new they are, they can only get a certain

amount of Lindens every month, and it wouldn’t have been enough to do whatever business

they wanted to do. I mean there really are a lot of factors out there that I don’t think

everybody has considered.

BEYERS: Okay. And let’s see. Who else would like to--Jillian, do you have a perspective on

this?

JILLIAN: [NO RESPONSE]

BEYERS: Did we lose Jillian? Okay. Well, let’s see. We’ve heard on those last couple

questions.

JILLIAN: I am sorry there.

BEYERS: Oh, there we go, Jillian. Hi.

JILLIAN: I was in Second Life so basically it took me one second to jump back to Skype.

Yes, what I wanted to mention is basically it is important for us to realize as avatars in

general why we are in Second Life. Is it basically that we want to be entertained by

something? Is it that we want to learn something? Because, at the end of the day, it’s the

decision of every person that opened an account with such a bank to take the risk and

basically give their money to someone they don’t know. In Real Life, we don’t just go to

anybody and say, “Here. Have my money. Please take care of it, and you’re going to give

me a lot of money back.” That is not how it works. So basically when we are in Second Life,

we need to be aware that if we don’t have proper regulation, in reality this is what we’re

doing, and are we really willing to do this? And, if we are, is it because we think we’re going

to learn something out of it? Why am I doing it?

BEYERS: Yeah. I think one of the questions that we’ve been seeing repeatedly during our

Metanomics sessions on the financial institutions in general is why are people in Second

Life using them? And I think one of the things that we see today is that that’s not a very

simple question to answer. There are people who are doing it because they see profit

opportunities. I think there are people who are creating institutions because they see

illegitimate profit opportunities. And there are a lot of people who are doing it as a form of

role play or entertainment. My view is Linden Lab has a difficult job, really, in balancing

appropriate regulation in light of all of these differing roles that the financial community plays

in the Second Life residents’ lives.

So I guess that’s all the time we have or maybe then some. I would like to thank all of our

panelists: David Talbot from Technology Review; Ben Duranske of virtuallyblind.com, who is

currently writing and rewriting a book on virtual law; Travis Ristow, who represents

BCX Bank; Intlibber Brautigan, who represents Ancapistan Capital Exchange; and

Jillian Falconi, who represents Saxo Bank in Denmark. Thanks to all of you for putting this

show together. Thanks to SLCN for arranging the technical details, and I guess thanks to

Cornell University’s Johnson Graduate School of Management for letting me play my part in

this.

So thank you all again for participating in this special panel discussion on the Linden Lab

new banking policy in Second Life, and I hope we will have further discussions. Thanks a

lot.

[END OF AUDIO]

Document: cor1001.doc Transcribed by: http://www.hiredhand.com Second Life avatar: Transcriptionist Writer