In a blog entry, Second Life publisher Linden Lab has acknowledged it was contacted by a German TV station that said it had discovered images in the virtual world showing a child avatar engaged in "depicted sexual conduct" with an adult avatar.
Linden lab said it quickly began an investigation and banned the two people behind the avatars, as well as removed the images.
The television station said it had turned the images over to German authorities, but Linden Lab explained that it had not been able to get in contact with law enforcement there.
The practice of having child and adult avatars playing at sex acts in virtual worlds is known as age play, something that has been a taboo subject among the Second Life community for some time.
But Linden Lab said it has a zero tolerance policy regarding such behavior and acts quickly to remove residents who engage in it or the content itself when it is informed of its existence.