Anti-fraud police are investigating virtual world ‘Second Life’ after concerns were raised that cyber-crime there could be rife. Second Life has its own unique economy and a currency called the Linden dollar. Linden dollars in Second Life are exchangeable for currencies in the real world, and security chiefs think that crime lords could be using this to their advantage.

"Millions are made in Second Life. Where there's money there's crime," said detective chief inspector Charlie McMurdie.

Some analysts think that Second Life’s GDP (gross domestic product) is worth over $500m which would certainly make it a ripe target for fraudsters and money launderers.

Second Life under threat?

The creators of the site have come under fire in the past because while Second Life’s currency is in effect exchangeable for real money, the Terms of Service state that Linden dollars have no intrinsic value. What’s more, if any virtual-money is lost from the Second Life database, the Second Life creators are not required to pay any compensation.

Almost 800,000 UK residents have set up avatars (virtual identities) in Second Life, which is why the police here are concerned by the risks posed.

Only recently, police in Holland arrested a teenager accused of stealing €3,580 (£2,800) worth of virtual furniture in Second Life. No one quite knows how common this kind of cyber-crime is.