[MUD-Dev] Reality check ...

[Dave Rickey]

From: <Daniel.Harman at barclayscapital.com>
> From: Dave Rickey [mailto:daver at mythicentertainment.com]
>> From: "Matt Mihaly" <the_logos at achaea.com>

>>> I don't believe any court is going to consider the fictional
>>> context of games. And the virtual 'sword' is just a collection
>>> of data.

>> Your bank account is just a "collection of data".  Therein lies
>> the problrem.

> Banking is highly regulated, and that data is backed by real
> liquidity. I don't see how you can draw a comparison. If it gets
> to a point where you can, be very afraid - you don't want that
> level of regulation. If we were to extrapolate, can you imagine
> having to asset back virtual items as you spawn them?

I used to work in financial IT, so I know just how much of a
nightmare satisfying fiscal regulations in computer code is.  But,
as they say, follow the money:

We have three possibilities: Players own the value of the virtual
goods accumulated by their characters and attached to their
accounts; or they do not own that value but it instead lies with the
operator of the game; or there *is* no value in the legal sense and
therefore no ownership issue.

If they do not have ownership, or if that value has no legal
existence, all well and good for the industry, right?  Maybe not.
Assume that the black markets continue to exist.  Therefore, at
least in theory someone could buy virtual assets, hold them for some
period of time, and then sell them (many ebayed accounts get sold
multiple times).  That's real liquidity, yes?

Then someone facing bankruptcy or another form of court-ordered
asset forfeiture could buy virtual goods, hold them until after the
proceedings/statute of limitations, and cash them in.  Return rates
from the conversion as low as 25% of the original value would be
competitive with traditional asset shielding techniques, and this
one has the advantage that legally the scofflaw doesn't have those
assets and therefore is not concealing them.  Either they do not
belong to him, or they just plain do not exist (he's burned up his
assets playing a game rather than see them siezed, in a legal
sense).  Congratulations, you just engaged in money-laundering and
got away with it.

Transparent as hell?  Sure is, and that's how his creditors would
see it, and almost certainly how a court would see it.  You can't
predict exactly what a court would make of the situation, but they'd
damned well want *somebody* to cough up the dough, and who would be
standing there with deep pockets and an expression of complete
shock?

Maybe we could lobby Congress into making it a crime to sell virtual
goods?  It's not a violation of the DMCA to sell gold from these
games, it's wire fraud because you're selling something you don't
own?  Boy, that woud be interesting.

I'm not just spinning theories here, folks.  All those acres of
trees were killed printing up the banking laws because of equally
bizarre (and even more complicated) ways people found to make value
disappear from one place and appear in another.  Your reality check
is in the mail, but there's a guy from the SEC who wants to talk to
you first....

--Dave


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