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SL banking failure blamed on gambling ban
« on: 2007-08-09 18:58:38 »
Source: Ginko Financial
Announcement 08/08/07 10:20PM EDT
Ginko Financial was established in December 2004 at a time when Second Life had less than 20,000 residents. As one of the strongest brands in Second Life we have seen the economy grow to many millions of residents and thousands choose Ginko Financial as their preferred financial services provider.
As you probably already know, Ginko Financial has experienced some challenges in these last couple of weeks. Following the ban on gambling in Second Life we began experiencing a wave of withdrawals from Ginko Financial. This led the funds we keep in reserve for day to day use to be exhausted, which evolved into a full blown panic depleting even our last line of cash reserves and resulting in the current situation, with about L$50,000,000 queued up for withdrawal. This situation is unsustainable, as we would be forced to sell off our assets at a significant discount in order to honor such withdrawals, thus severely harming Ginko Financial's long term prospects and it's ability to ultimately honor all of it's obligations to accountholders.
We had some hope that calm would return to the public and we could resume normal operation, but that does not seem to be likely or even possible anymore. Drastic steps have to be taken in order to protect YOUR wealth while giving an escape valve to anyone who is in panic or simply in need. We are not going to vanish and the investments we made still exist and will not be sold off.
After considerable thought, we have concluded that the only way forward from this is to convert, compulsorily, all customer deposits into a tradeable debt security called Ginko Perpetual Bonds. These bonds, listed on the World Stock Exchange (www.wselive.com), will allow Ginko Financial to recover from recent events by removing all pressure from our cash reserves while providing accountholders with a way to cash out on an open market.
All accountholders will have an account automatically created on the World Stock Exchange (www.wselive.com). Customers will receive one bond with a face value of L$1 for every L$1 they have deposited in Ginko Financial. Each Ginko Perpetual Bond will yield L$0.03 or 3% of face value per quarter (every three months). Ginko Financial will be actively purchasing these bonds in order to help keep prices at as high a level as possible.
Ginko Financial will bounce back from this and if you stick with us, you wll not lose anything. If you must sell the bonds, then you must sell, but I advise against accepting low prices.
Nicholas Portocarrero / Andre Sanchez