The Second Life economy is rumoured to be in crisis, with spiralling interest rates and a recent ban on in-game gambling in the US setting off financial chain reactions throughout the unregulated Second Life banking sector, according to various online reports.

In-game 'bank' Ginko Financial is currently at the centre of what some users describe as a "bank run", with members unsuccessfully trying to retrieve funds from Ginko for more than a week. Ginko CEO Andre Sanchez now says that his company is in an "unsustainable" situation and instead of returning funds to users, they will instead be issued 'Ginko Perpetual Bonds' for trading on the Second Life stock exchange while the company reassesses its situation.

Although a virtual environment, the real world value of the Linden dollar game currency means that Second Life banks are in effect managing the real funds of their users, with analysts warning the lack of financial regulation exposes thousands of subscribers to financial damage in the event of an economic crash, with Ginko as a possible test case.

All in-game financial institutions are defined as 'games', despite offering financial services such as loans or investment portfolios, and many offer interest rates and services astronomically more favourable and competitive than those of real-world equivalents. With the lack of official regulation, users are reliant on in-game complaint systems to arbiter any disputes over in-game finances and the possibility of an economic crash could see many losing their Linden dollars, and their physical equivalency, should situations such as Ginko's become commonplace when unexpected factors such as the gambling ban cause economic shifts. Forward to colleagues