NOBLE THOUGHTS ON GINKO

On his blog Virtually Blind, real life/Second Life lawyer Benjamin Noble has entirely owned the story of Ginko, the SL-based financial service that has been offering incredibly high interest rates to Resident customers for the last few years (and subsequently, has attracted high skepticism over its management and cash liquidity.)  Noble was there to offer a deep and unflinching analysis of Ginko, interview the founder, report first-hand on a failed buyout/IPO attempt, and in the end, after it entirely closed operations, finds a positive note in what must have been a stressful culmination for the service's many customers.  What happened, he writes, was a triumph of community self-policing:

It’s a few brave depositors asking hard questions on Ginko’s boards and getting pummeled for it. It’s hundreds of customers at Ginko ATMs who wouldn’t stop insisting on answers. It’s Ginko’s volunteers, who often provided information honestly and without pretense even when management wouldn’t. And it’s the persistent comment posters on every site who wouldn’t let the apologists, the pretenders, and the shills win.

Read it all here.

Comments

[Ordinal Malaprop]

Oh, for Heaven's Sakes.

When Ginko started, people pointed out that it was utterly absurd. Throughout its existence, people have been pointing out that it remained utterly absurd, with no transparency in the slightest.

And now that everything has come to pass which was predicted - that the absurd interest rates were completely meaningless if any significant number of people attempted to withdraw, that really, the numbers meant nothing, the "reserves" were made up, it was all just another high-yield investment scam - there are "serious analyses" of the matter, as if this was a surprise? And there are, across the so-called SL financial press it seems, dozens of people treating Ginko as if it were a respectable institution that just happens to have fallen on hard times.

[Benjamin Duranske (avatar 'Benjamin Noble')]

Thanks for the note, Hamlet. Ordinal is right: it's been this way from the start. It took a bunch of problems hitting at once to tip it over, but at bottom, was all due to the greed of a few people. It's important to remember that they took around $100,000 USD out of this thing.

Anyway, I've gotten a ton of traffic off of these stories, and it seems odd to profit on somebody's loss, so while it's not much money, I'll take the $15 or $20 bucks that these are generating and go spend it at some stores of people who got beat up in this thing. I won't buy the bonds, because that's another story all together (they're forcing people to sell them on WSE and making money on the transfer fees - appalling) but I can buy my next suit from somebody who could use the cash. Shoot me a note, I'll drop by your place.

Thanks again for the link, Hamlet. And good luck to everybody hit by this. Most importantly, don't any of you leave over a bad apple or two.

[HeadBurro Antfarm]

I only came into this at the ned, but I seem to recall reading on their site that they were 'unregulated' (I can't remember the exact term used).

Unregulated. If that didn't flash a bloody great red warning light over them from the start, what would? " Hi, you don't know us. Give us your money and it'll be all safe and lovely. Now Sleep..."?

HBA
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