Second Life is banning unregulated banks from its virtual world after a run of defaults by financial institutions offering interest rates unobtainable in the real world and unsustainable in a virtual one.

San Francisco-based Linden Lab, which runs Second Life, is prohibiting from January 22 any object, such as a bank or ATM, which offers interest or any direct return on an investment, unless it has proof of a real-world government registration or financial institution charter.