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Virtual Bank Woes
bobmorning writes "EVE Online's largest player-controlled virtual bank, Ebank, just can't seem to catch a break these days. A few months after it was revealed that the company had been defrauded of a staggering amount of virtual cash, it turns out that the institution's digital vaults are far more barren than many realized, leading to an in-game freezing of accounts for any individual or organization that happened to have invested any InterStellar Kredits (ISK) with the bank. Early this summer, it came to light that a veteran EVE player (known only as 'Ricdic') had embezzled — and then sold in the real world — over 200 billion ISK from Ebank, causing a run on the virtual financial institution. However, this was just the beginning of the problems for the player-owned bank. Recently-installed Ebank Chairman Ray McCormack admitted that the bank had been mismanaged, and rules, safeguards, and controls were not enforced. As a result, it's been revealed that Ebank is 380 billion ISK poorer thanks to a number of defaulted loans. Because of the aforementioned mismanagement, it apparently took the bank's new officers a while to figure out just how far in the red their institution is."
We clearly need a virtual federal reserve and a bernanke-borg.
Maybe they can get $25 billion, just like Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.
Ok, I knew EVE was a deep game. But honestly, is it basically a scifi Second Life with fights?
At a time when real people are losing real things due to bank and financial mismanagment on an epic scale...
I can't seem to give one damm about some virtual bank screwing people over in many of the same ways.
... to access the REAL world.
now we need to go OSS in diesel cars
Maybe I can send over some virtual sympathy for the defrauded investors.
I used to play Eve-Online, and the only rule that was absolute, was that you should NEVER trust people that you are not in real life friends with. Almost every person in the game would rob you at a moment's notice with no remorse, and brag about it afterwards. There's stories where people joined companies and rose to the ranks of massive alliances, just so they could close the alliance and screw everyone ever. To top it off, there's not a single thing you could do about it. That's why the banks have always baffled me. I've never been able to understand how giving your isk to somebody else could ever possibly turn out to be good. One other major example of this was the lotteries they used to run, somebody ran a lottery giving out massive prizes for weeks, until he was trusted enough to get a few billion isk in lottery ticket purchases. Then he ran off with the entire thing and vanished.
This seems very cynical, and I'm sure many of you are members of successful corporations where you trust the random people you meet on the Internet. However, I was in the Phoenix Alliance, and I remember the first Dreadnought stolen because somebody has the password to the damn space station and gave it out.
So yeah. In summary, trust nobody that you can't go beat up in person.
So how much was the 200 billion in imaginary money worth to the insanely retarded people in the real world who forked over real world cash for it?
The Darwin awards are a grand invention but they can only be awarded posthumously. We need something to mock world-class (but less-lethal) stupidity like this as well. Maybe the "PT Barnum Awards". They could be given out in televised public ceremonies and the "winner" plastered all over the internet for the amusement of the less-stupid.
Nothing worthwhile ever happens before noon
Who gives a fuck. Something is happening in a video game. "News for nerds, stuff that matters?" Take it to the game's forums. Will you guys run a story every time I get a new epic from Ulduar?
Which part of this post is about reality and which part is about gaming?
The bank CEO's mother called and was wondering when he was going to clean the dishes.
Every time someone posts a story about an MMO, people always make comments about players needing a life. It sounds a lot like there is real drama with real people happening in Eve, and the players get a chance to do things they would never do in real life (such as run a bank).
It doesn't seem that bad. It's real human interaction, real relationships and drama. It's not the sort of thing I'd want to do, but I can see why people get a lot out of it.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
... I find these stories interesting. How is the online world coping with the new institutions it must create with the added complexities of fast growing virtual worlds? Will it find a new way of doing things, or just repeat the same mistakes (this looks like repeating the same mistakes that were made a few hundred years ago). I have no idea how much a billion ISK is, but this is pretty big news to those that had their "money" in these institutions, even if it was just for play.
In a world of massive real world bailouts and ~10% unemployment, this may not "matter" much, but it's definitely news for nerds.
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
default? :-P
sorry that was low hanging fruit, very easy to pluck... just like ISK from a bank :-)
at least everyone's accounts are eFDIC insured up to $100k fake dollars.
Good thing, too... this sort of thing could spark an virtual bank run resulting in an imaginary depression. Next thing you know, everyone would be forced to ride the rails as hoboes in Railroad Tycoon.
This space available.
Because you'd think a virtual bank would be managed better than a real life bank. Apparently, they're managed the same way.
Would you?
The only reason real bankers aren't stealing billions is because they don't want to go to pound-you-in-the-ass federal prison.
Take that away and bingo, everyone's a Christopher Skase.
The fact that this guy defrauded the virtual currency for real money means I think the authorities actually should get involved.
The law of this guy's locale should be obeyed whether he is doing it to someone in person or someone in a video game.
Why? To embezzle virtual money seems to be within rules of the game. And selling virtual money for real money is likely no crime, if he delivers.
Real banksters don't steal billions, they steal trillions.
Yeah the economic crisis is pretty bad here in virtual world. I can no longer afford my second life prostitutes. I even lost my job as a store owner in WoW -- they outsourced it to AI where all the bots do the work. I can't even afford my mana potions, I have to connect to a Canadian server just to buy them on the cheap...
Trying to install linux on my microwave, but keep getting a kernel panic...
No but it is a violation of the TOS, and can result in both the seller and buyer's acounts getting banned and the isk deleted.
There are legit (ccp allowed) methods to turn $$$ into isk. you buy game time, eigther as code or an ingame item (plex) and sell that for isk.
Mycroft.
https://signup.leagueoflegends.com/?ref=4c3ed6600b6ea
the Icelandic bank meltdown. They turned out to be a Ponzi scheme, with the bank's major shareholders taking out loans into the billions of dollars, investing that in other companies, which in turn went bankrupt, taking Iceland's money with them.
For fuck's sake, I don't get a front page story every time I run over a whore in GTA (headline: "Funeral Today for Victim of Brutal Virtual Hit and Run"), so why do Second Life and Eve get stories every time something virtual happens?
Just like real banks!
That EVE world adopt a virtual gold standard.
I'd like to posit that the money in Eve Online is just as real as a dollar bill. I mean, you can buy ISK on Ebay, so there's an exchange rate of about 12 cents per million ISK. It's measurable, it's real, because ISK can be purchased for real money. What makes ISK less real than the Hungarian Forint, or the Chilean Peso, or even the US dollar? Currency very simply is people placing value in something that is not really intrinsically valuable. IE. paper dollars, little metal coins, huge stone wheels, bits of code relating to ISK, etc. So b/c it's valuable to these people we have a situation where the currency is very real. At least as real as any other form of currency has been.
How does this have anything to do with 'democrats' and 'bailouts'? If anything EVE's economy is an anarcho-capitalists dream where you can do pretty much anything to convince people to give you money.
Typical. I am just thankful that the only money I ever borrowed in my life was to buy my own place and that is now paid off, but as long as society believes in "Boiler Houses" Getting a return on your investment forget it. Hedge Funds, will be the next thing to hit the banking industry and when it does... you can kiss all investments worldwide goodbye including your cash. Forget the Federal Reserve or the IMF. The only safe way to avoid any economic depression, is buy gold. You have been warned, the time bomb is ticking!
All cows eat grass!
second life had people bilking citizens out of money too. only a fool would hand over their money to an anonymous person in a simulation or game.
Yes, it's a violation of the ToS. But it isn't illegal. So there is absolutely no reason for The Authorities to get involved.
Do the rules of the game actually state that it is impossible to enter a contract within it?
Justice is the sheep getting arrested while an impartial judge declares the vote void.
Yes, because there are not vast multi-billion dollar drug distribution rings.
You are correct, the MOB doesn't exist and all of the CIAs black-ops have come to light.
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Eve and computerized economies (including the real one) can only work when authority is distributed, and rules can be enforced.
The idea that one person could actually control a Dreadnaught, battleship, or anything much larger than a dingy is ludicrous. The idea that a single password would be used to control access is equally silly although convenient in a game environment.
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Yes we hare complicated beings with many levels of trust and methods of control and enforcement. This really only breaks down (either through bureaucratic decay, or through embezzlement and looting when a small number of people can gain control over assets that are larger than their ability to reimburse for, or where normal enforcement methods are intentionally circumvented for "efficiency".
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Our financial system became very efficient and allocating home loans recently. Risk and return were reduced to simple numerical models (made obscure and believable by geeks at the behest of their masters) and the people allocating the loans, measuring risk, and making money redistributing complex instruments didn't care that the "efficiency" failed to measure the buyers-recipients getting paid. It was efficient at "making money" for a variety of nonpunishable corporations that were "TooBigToFail". Even for the buyers-recipients it was OtherPeoplesMoney, and their personal wealth was increased by increasing returns on that pension/insurance company even if it would blow up after they were gone.
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It didn't need to be that way. Old laws (Glass Steagal) had to be repealed, regulators had to be neutered (SEC FINRA etc), rating agencies had to be co-opted, Prosecutor/Govenenors had to be ruined in prostitution scandals, and the FedReserve needed to look on it's work (smoothing the economic cycle by growing ever larger bubbles) with great satisfaction. None of the individuals could take responsibility for their decisions (eg the appraiser responsible for evaluating $1B in housing value) due to the sheer size, and corporations existed to prevent prosecution of individuals. Everyone had "deniability".
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And yet... it lasted for 80years, which is right about the correct time for a maximum size human Ponzi. Read up on fractional reserve lending, and explain how with the issuance of only debt based money, you do not have a potential crisis when the exponentially growing total future-money owed becomes larger than the present-money available.
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http://en.wikipedia.org/wiki/Fractional-reserve_banking
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You have a Nash equilibrium where so long as everyone agrees there will be more debt-based money in the future then they will be able to be paid, but once a significant group of people decide to take what they can (first out the door), then there is less debt, less money, and the future debts can only be repaid (if at all) in inflated dollars which are worth less than was lent. It's a very simple and convenient fiction that the world bases its monetary system on, and it is very productive and useful, until it fails and a small group of people make off with the majority of the wealth. The redistribution of that wealth will be ugly and not very productive.
Since you promise in a legally binding contract (TOS) not to do it, it can be illegal. I know TOS has probably never been enforced like this before for a game so there's no legal precedence but it could happen if the trial goes well enough.
To the best of my knowledge, breaching a usual contract is not a crime. Well, I guess breaching some hypothetical "contract with society" is the fundamental basis of criminal law. But we're talking about a contract between a person and a company. No laws are broken there.
I do recall some cases though where people "stole" "things" in games like second life and courts found that those actions were tantamount to theft - the wrongful dispossession of property; however, I would distinguish Eve as these types of wild west interactions are sort of the purpose of EVE. From what I understand, and correct me if I'm wrong, its sort of what a lot of the players sign up for and its definitely what intrigues me about the game.