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World Stock Exchange LogoSeveral sites are covering a claim on the website that the World Stock Exchange in Second Life was hacked, and approximately $L3.2m (US$12,000) was taken.  Reuters has the most comprehensive story. [Update: Robert Bloomfield over at Metaversed has a more recently updated story up that discusses some of the fallout currently circulating.] [Update: Bloomfield has another article up, this time covering a meeting of the Second Life Exchange Commission to discuss this incident.]

Each time in-world criminal allegations like these arise, it increases the likelihood that real world regulatory bodies are going to step in. My prediction? We see a headline with both “Second Life” and “Securities Exchange Commission” in it within the year.

There is one really interesting legal question here — whether stealing Lindens from the WSE is a crime in the first place, or more like stealing from players in Ultima Online.  After all, the WSE’s head ‘LukeConnell Vendeverre’ (along with other exchange leaders) recently took the position that “the exchanges are a game,” but I’ll leave that for later.

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5 Responses to “Second Life World Stock Exchange Allegedly Hacked for L$3.2m (US $12,000)”

  1. on 24 Jul 2007 at 1:53 pmNobody Fugazi

    It’s all kind of uncertain. There are no ways to show precedents within the Linden Lab abuse report system, and banks and other businesses have fallen at cost to people who have invested.

    Best words of advice, I think, are ‘Buyer Beware’.

    I did post something from Unga Pau which is interesting, though:

    Rather intriguing that someone who is not in the Linden Lab search engine is being shown as a shareholder in MDS. Is this a disconnect between the WSE and LL? Perhaps. But WSE is putting in Lindex ability, which could open a doorway for fraud… I don’t know that the Linden Lab Risk API would have something to do with that… or maybe, just maybe, the Risk API caught it. :-)

  2. on 25 Jul 2007 at 10:58 amBenjamin Duranske

    This piece went through an uncharacteristically large number of edits, and the end result is the short blurb you see above. If you think you saw something else earlier, you probably did. I’m breaking my own rules here by significantly editing after posting, but hey, that’s the joy of owning the blog.

    The problem, I’ve discovered, is that trying to cover these kinds of allegations requires significant investigative resources. Between that, and the fact that there’s never much of a legal angle anyway, I’m planning on only covering allegations of “virtual crime” with short pieces like this going forward except in extraordinary circumstances.

    Even with the well-researched Reuters piece, I’m still not entirely sure what happened. There’s all sorts of accusations in various forums between everyone involved, and I’m not at all sure the whole story will ever come out. After trying to cover a few of these, I’ve found that’s pretty much the norm.

  3. on 27 Jul 2007 at 9:50 amBenjamin Duranske

    As is traditional with these kinds of allegations, this has turned into a game of pointing fingers and excessive retaliation. Don’t trust me on this? Ask the original poster, who says… “this has turned into a game of pointing fingers and excessive retaliation.” Okay, that was too easy. But you can see why I hate covering these things.

    For posterity, here’s a couple articles about finger pointing and excessive retaliation, to close this round of the story out.

    But by far my favorite story is this one, which is only kind of related:

    It’s a brief note announcing that the guy who allegedly stole the $12,000 from the WSE (who is, of course, banned from SL) posthumously won a lottery run by another financial institution arguably in dire need of regulation, Ginko Financial. Ginko apparently plans to keep the prize, since the winner can’t collect it. Not that the lottery was remotely legal in the first place, but now this? The guy was banned before the drawing! Come on.

  4. on 27 Jul 2007 at 11:28 amBenjamin Duranske

    My lighthearted comment about the alleged scam artist winning the Ginko lottery lead me to Ginko’s webpage, where I discovered, somewhat more soberingly, that they suspended withdrawals this morning. I just posted a piece on that, but wanted to put something here as well since the situation seems a bit more ominous than I’d realized when I posted the above comment.

  5. on 03 Jun 2009 at 3:13 pmunknown

    Not a crime

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