Comments on: Play Money, Real Fraud

By: Dartwick

Dartwick — Sat, 11 Aug 2007 18:06:40 +0000

This same basic thing happened a year aor so ago in EVE.

Actually trusting people in vidio games is stupid.

By: Baroo

Baroo — Fri, 10 Aug 2007 02:37:36 +0000

“Unless you live in Neva Neva Land.

Well played, sir. Well played.

By: J.

J. — Fri, 10 Aug 2007 00:40:36 +0000

Real men make games in Garry’s Mod. Oh yes.

By: JuJutsu

JuJutsu — Thu, 09 Aug 2007 23:56:25 +0000

“I mean… it’s not any less illegal to run a *successful* ponzi scheme.”

Unless you live in Neva Neva Land.

By: Benjamin Duranske

Benjamin Duranske — Thu, 09 Aug 2007 22:56:04 +0000

Thanks for the nod. I’ve read Broken Toys for a while. Great site.

Aufero – Re: your second point, what I expect happened here is that a surprisingly high percentage of depositors just quit showing up in Second Life (or forgot about their second, third, and fourth “alt” avatars) and left money with Ginko. Anyway, when the argument against you is boiling down to: “but it lasted a long time!” I can see the towel sailing in from ringside. I mean… it’s not any less illegal to run a *successful* ponzi scheme.

By: Aufero

Aufero — Thu, 09 Aug 2007 16:47:54 +0000

@Prokofy

1) Ponzi schemes almost always involve frequent statements and appearances by the originator – they’re run partly on on the originator’s charisma and perceived trustworthiness and acumen. (And there isn’t a definition of the term that has anything to do with how long the scheme runs.)

2) Length and complexity are not the same thing. Early investors in ponzi schemes often reinvest later on, for a variety of reasons. Much has been written about this over the years, you might want to read some of it.

3) The phrase “sneering with all the predictably gloating vindictiveness that events like this cause from people who hate virtuality because they fear it” is ludicrously overblown and accusatory for the argument. Have you considered entering politics? Nixon has been dead long enough that his schtick might be successful again.

By: VonKaiser

VonKaiser — Thu, 09 Aug 2007 15:22:52 +0000

I don’t think people really fear virtualization, I just don’t want a future where my elderly mother may be pelted with raining weiners on an otherwise cloudless, sunny day. Is that so much to ask?

By: yunk

yunk — Thu, 09 Aug 2007 15:19:07 +0000

OH and one thing: there have been other examples I have read about that had “altruistic” people really trying to help, who inadvertently set up ponzi schemes. This is ESPECIALLY prevalent among churches and other non profit organizations.

So, their motivation doesn’t mean much in the end.

By: yunk

yunk — Thu, 09 Aug 2007 15:15:07 +0000

oops switch that last line around

By: yunk

yunk — Thu, 09 Aug 2007 15:14:01 +0000

The length of time means nothing.
Investment returns CANNOT come from future contributions. If they do at all, it is a ponzi scheme just waiting to collapse. It doesn’t matter how long it ran. That is the base definition. If it did that, it’s a ponzi scheme. No need for any further discussion.

It’s very a basic question. Did investment returns come from deposits or not? It’s yes or no, that’s all. You answer the question right here:

“altruistic behaviour and make CDs for 90 days to enable others with small amounts to cash out,”

They were using deposits to pay investors, not investment returns.

Match. Set. Game.