Eve Online Game Player Embezzles Virtual Money, Creates Real Trouble

An Eve Online player has rocked the game's virtual world by embezzling a huge sum of virtual money

2 min read
Eve Online Game Player Embezzles Virtual Money, Creates Real Trouble

eve online

A financial scandal has hit the universe of Eve Online, a sci-fi computer game, according to a report in BrekingViews. Created by Icelandic company CCP Games, Eve has more than 300,000 subscribers worldwide and is what gamers call a massively multiplayer online game, or MMOG. Players spend their time exploring solar systems and blasting away opponents in starship battles. (To understand what the game is all about, see the profile of Eve's software development director, Erlendur Thorsteinsson, that I wrote for our Dream Jobs report.)

Like other MMOGs, Eve has a virtual currency so players can buy and sell stuff -- weapons, ship modules, and so forth. What's remarkable about Eve is that players are also able to create new ventures and businesses. Players with an entrepreneurial streak can start companies, generate revenue, issue stock, even launch an IPO. In fact, Eve has one of the most complex universes ever seen in a MMOG. One in-game industry that flourished, not surprisingly, was banking. Eve's banks operate just like real ones, holding deposits from customers and lending money for a fee. Eve's largest is called EBank, and it had operated well until ... a top banker decided to run away with the money.

From the BreakingViews report:

Enter Ebank, this virtual universe’s online bank. Because players often do not have the interstellar credits — abbreviated to ISK, also the official abbreviation of the Icelandic kroner — they need to expand their fleets, an enterprising player created a bank that would accept deposits and lend to players who would pledge assets, like their spacecraft, as collateral. 

The bank was a success. According to its Web site (yes, it has one), Ebank accumulated about 8.9 trillion ISK in deposits in 13,000 accounts belonging to 6,000 users. That was far more than it was able to lend out — there were around 1 trillion ISK of loans. 

Somewhere along the way Ebank’s top executive, who went by the online handle Ricdic, apparently got greedy. According to CCP, he made off with deposits, which he then sold for real cash to gamers on a sort of black-market exchange separate from Eve.

How much was stolen? And how to recover the money? Those are the questions that other players who help run EBank are trying to answer. It's clear this is not a Ponzi scheme -- Ricdic is not the Madoff of Eve. The embezzled sum is just a fraction (the BreakingViews story says 10 percent) of the bank's total deposits. Still, the episode has already triggered a bank run. (EBank says its deposits amounted to 2.5 trillion ISK, not 8.9 trillion, adding that the bank run is over and that it is well capitalized.)

What's most puzzling about this banker-gone-thief episode is that it's not Eve's first. It's happened before in 2006, and again early this year. I wonder if the game creators at CCP might decide to take action by establishing a regulatory agency or perhaps a kind of deposit insurance like the FDIC in the United States. Or perhaps the creation of such regulatory and insurance entities will be left to players -- another in-game enterprise with great potential to flourish.

UPDATE: Dr. Eyjolfur Gudmundsson, a CCP employee who is Eve's lead economist, acting as a kind of in-game central bank chief, tells us that EBank has to fix its own problem: "This is something that EBank will have to solve on its own since this is a player driven entity operated by players for other players."

Image: CCP Games/Eve Online

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