1. Portocarrero himself attributes it to the gambling ban. He didn't explicate, but it makes a lot of sense to me, because it has certainly prompted casino owners to withdraw whatever funds they had on deposit from wherever they had them. I also wonder if Ginko may have had big investments in some of the remaining casinos as some of their "liquid" capital.

In any case, though I strongly feel a writer's voice should be his or her own, this piece raises some questions for me. I've been a critic of Ginko for a while, and the Reuters piece you cite identifies and links to VB's rather skeptical piece that first ran this news, but you didn't link to it. That, combined with the facts that a) head of Ginko calls this a "bank run," and b) they dropped the daily withdrawal limit 98% in one day (300k to 5k), I must ask if the writer has funds on deposit with Ginko or is otherwise acquainted with the subjects of this story. It seems only fair to readers to disclose if true. If not, I apologize for the insinuation, but the tone here strikes me as oddly pro-Ginko.

Posted at 4:05PM on Jul 27th 2007 by Benjamin Duranske

2. wasn't Ginko the competitor to SLBank that paid higher interest on peoples account, so high many people didn't advise putting money on it cause it sounded too good to be true? (not being sustainable in long term, promising to pay more than they could lawfully be profiting, stuff like that)

Posted at 7:52PM on Jul 27th 2007 by TigroSpottystripes Katsu

3. Yes, Tigro. That's exactly right.

And I'm, frankly, wondering how much of the blogosphere has cash in it and won't say boo right now because of that. It's huge. They've got 3/4 *million* USD according to their site and can't pay depositors? And the coverage is basically me, Reuters, and this somewhat soft-soap piece (forgive me, Eloise, but it's really pretty easy on a company that looks an awful lot like a giant scam to pay for college for a bunch of kids)? Where's the outrage here? More importantly, WHERE IS EVERYONE'S MONEY?

Posted at 7:57PM on Jul 27th 2007 by Benjamin Duranske

4. Benjamin, sorry I missed the link to your piece, I will go back and edit the main post in a little while to add a link to it.

I have a small amount of money in Ginko. If it goes South, I will shrug and move on. I don't think it colours my opinion of them.

What I do have is a long, although mostly not in SLI, history of saying "Whilst GF *may* be a scam, you should make your choices for yourself" just as I do for WSE etc. There is no evidence of GF being a scam, although it has many characteristics that make it appear to be one. You can balance that, if you choose, against a longer than 2 year history of generally happy customers (or dupes) and choose where to put your money.

I find it interesting that person who initially started this "Ginko is a Ponzi" was looking to open a bank, attacked violently, about 18 months ago now, and yet Ginko is still going, more or less strong (until yesterday).

Whilst Ginko could go down, and could all be a scam, it could well survive too. I'm putting my (small) amount of money where my mouth is, and saying that I think it will.

Posted at 12:34AM on Jul 28th 2007 by Eloise Pasteur

5. Thanks for the link to the original piece, Eloise. I appreciate your perspective, and while I have also tried to keep an open mind, there is a veritable mountain of -- admittedly circumstantial -- evidence that Ginko is surviving on new deposits and misreporting income.

What has probably kept it afloat is that a certain, perhaps high, percentage of Ginko's depositors have dropped out of Second Life and left some cash with Ginko, which has given it the ability to pay off people who have withdrawn. That can't last forever.

Something happened yesterday that really confirms it for me though: they reported what simply has to be a loan against existing assets as a "new deposit" -- and I suspect that that's how their "Total Deposits" number has gotten as high as it is.

This is a little complex, but worth it.

http://tinyurl.com/34srcs (resolves to Virtually Blind).

Good luck to investors. I am not, but I understand the draw. I was seriously thinking of putting some money in -- those promised returns are tempting. But it doesn't make sense, and it simply cannot work in the long run. I don't know if now is the beginning of the end, or just the beginning of the beginning of the end, but if I'm right about the way they are recording loans in the commentary piece I just ran -- and I am pretty sure I am -- it is only a matter of time.

Posted at 1:11PM on Jul 28th 2007 by Benjamin Duranske