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US intelligence officials are growing increasingly wary of Second Life and other virtual worlds, which they say could soon become havens for terrorists, money-launderers and criminals engaged in corporate espionage.

The virtual "communities" offer many of the same amenities of the real world, including banks, multiple currencies, shopping malls and private buildings that can only be accessed with a password. At the same time, the companies operating these virtual wastelands typically don't log conversations between users or keep records of which avatars gather in particular locations.

"Unfortunately, what started out as a benign environment where people would congregate to share information or explore fantasy worlds is now offering the opportunity for religious/political extremists to recruit, rehearse, transfer money, and ultimately engage in information warfare or worse with impunity," according to a paper recently prepared by the government's new Intelligence Advanced Research Project Activity. It was reported here by The Washington Post.

The CIA has already set up several virtual islands where training sessions and unclassified meetings are held. But the IARPA paper calls for more involvement, including tests by cyber warfare experts to gauge how virtual worlds could be used to against terrorists or enemies.

"Virtual environments provide many opportunities to exchange messages in the clear without drawing unnecessary attention," the paper states. "Additionally, there are many private channels that can be employed to exchange secret messages."

In meetings with US intelligence officials, Linden Lab representatives have stressed the company has systems in place to monitor avatar activity and identify risky behavior. All financial transactions are reviewed electronically, and some are inspected by live people.

We're not so sure. Just about every time El Reg has entered into Second Life, we've been greeted by system crashes, lags of 30 seconds or more and other evidence that would suggest the servers at Linden Labs aren't among the more robust operating around the globe. We have our doubts about just how effective those security measures could be. ®

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