San Francisco - Linden Labs, operator of the online virtual world Second Life, has instituted a ban on unregulated banking in the wake of the dissolution of an in-game bank which saw investors lose the equivalent of $750,000, Wired.com reported.

The specific ban is on in-game banks that "offer interest or any direct return on an investment" without the same regulations that apply to real-world banks, and does not affect in-game banks that do not offer interest or other rewards.

Ginko Financial, the failed in-game bank, was among many similar institutions to have offered inflated levels of interest, a practice believed to have contributed to its shutdown.

San Francisco-based Linden Labs said in a blog post on the matter that it will remove all virtual ATM machines and other unregulated banks from Second Life by Jan. 22.

Related Links:
http://blog.wired.com/games/2008/01/second-life-ban.html

http://blog.secondlife.com/2008/01/08/new-policy-regarding-in-world-banks