Update: May 18th: Podex and Gyndex have indicated they have applied for Authorised Reseller status with Linden Lab.
Upate May 17th: Gwyneth Llewellyn provides an analysis of LL’s move – very much worth a read.
Linden Lab has issued a further statement on the recent changes to the Second Life Terms of Service relating to the buying and selling of Linden Dollars.
The blog post, which covers the fact that Linden Dollars can be purchased via credit card in using some 27 currencies and which includes the Lab’s “Getting and Spending Linden Dollars” Quicktips video, reveals that the Lab is launching a new programme of “Authorised Resellers” of Linden Dollars – a move which is likely to spake the most reaction.
The post reads in part::
Now, to give users more options and make it easier to purchase L$, we’re launching a pilot program of Authorized Resellers of L$. These sites are authorized by Linden Lab to purchase L$ on the LindeX and then resell those L$ using a variety of international currencies and payment methods. To be clear: per the Terms of Service, these resellers will not be allowed to purchase L$ outside of the LindeX (i.e. they will not be able to buy L$ back from users and cash people out). The list of Authorized Resellers participating in the pilot program is available here.
If you would like to receive an application to the program when it formally launches, please send an email to LDollarSeller@lindenlab.com.
The initial list of Authorised Resellers comprises AnsheX, Buildo, VForEx Inc, VirWoX, and Zoha Islands, with more potentially to be added to the scheme – there is an invitation for other exchanges wishing to join the programme to e-mail Linden Lab.
The full terms and conditions for the new programme can be found on the SL wiki.
Related Links
- More Options for Buying Linden Dollars – Linden Lab, May 17th
- Orginal blog post on ToS change – Linden Lab, May 7th
- Lab updates SL’s Terms of Service – May 7th
- ToS changes, FinCEN and speculation – May 9th
- SL ToS changes: Lab contacts TPEs; some get account suspensions – May 16th
Inara Pey: Living in a Modemworld 
So, TPEs will no longer be able to cash out? If that’s the case, would I be right to think that LL is taking action to stay out of FinCEN’s sights?
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I do not believe this wouldn mitigate them. They would still qualify as a money transmitter as they allow cash-outs via the LindeX, and thus still liable to classification as an MSB.
ETA: However, there might be some wriggle-room under the MSB exception clauses (I’d actually pointed this out to Darriius in an e-mail and forgot to add it here).
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That’s true; however, I do get the impression that they want to be perceived by the authorities as a low-risk MSB.
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Why all this was not done before all the changes and all the fuss?
And still one question remains, is the Linden on its way to be a close currency or Lindex will still trade Linden for real currency, even with all the delays that some accuse?
Personally being all for a close currency until i remind myself of the feed a smile, Relay for life and so many that depend on some SL income to ease their RL struggle!
I don’t wish that Sl was feed of greed and dreams of being another Ansh Chung but hope that Linden LAb can still make a division and allow some non profit organizations to cash out!
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People can still cash-out.
The blog post states that LL are looking at ways to speed-up cashing-out L$ via the LindeX and for increasing the number of currency cash-out options.
Why wasn’t this done in a more constructive manner? Good question.
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I didn’t watch the video, but it seems quite clear to me that the “authorised resellers” are effectively forbidden to cash-out L$ for anything valuable — which might include Bitcoin, OC$, or any other virtual currency. We’ll have to see what happens with the newly accredited resellers and how they interpret point 9 of LL’s new terms of service for the authorised resellers…
Still, this should allow non-credit-card users to at least pay for tier and their shopping experience in SL, and the major crisis may be averted. The world is a slightly worse place as of today (in the sense that the future of non-LL cash-outs being still open), but it’s not as bad as it was yesterday 🙂
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It’s an interesting move. I’m back to digging through FinCEN’s documentation to see where this leaves the Lab vis-a-vis MSB registration. I’d previously noted two (of the three) possible exceptions to registration which might apply; now I’m wondering if the Lab is leaning to one of them in particular, which relates to the matter of “stored value”. Will wait to see if Alex Kadochnikov weighs-in on the matter.
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With all the drama, suspensions, and confusion, this was poorly planned and executed.
Par for the course.
-ls/cm
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Absolutely.
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Agreed.
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Indeed. LL’s moves were more like knee-jerk reactions than carefully planned actions taken by a corporate entity run by professionals.
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pff. My greatest concern now has been solved, or, at least there is now an opening. My worry was that people without CC would not be able to get L$. Now the door is open to a variety of old services. SMS, cash bank deposit and other means will now be possible through the old providers. Since cash out is only possible through LindeX the others do not have to register in the same way as LL has to. Bad exercise LL, but we are used to that by now.
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Ok. and why do i need see any exchange in the pilot thats for years in sl and used big in europe like dsexchange ?? virworkz is the last one you would use. LL is breeding still on soemthing.
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You will have to ask DSExchange why they haven’t applied for reseller status. There are many possible reasons for that, one of which the requirement of presenting an insurance policy.
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LL has an insurance policy? *grins*
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LL states in the TOS that they are unreliable as business partners, the can not give a single guarantee. Not one. They own everything we have in-world and in-web, they can take it away whenever they want. But the TOS is good(tm) and I would never complain about that, since that could be a reason for them to drop my account.
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As far as I can see, there has been no word either way from DX Exchange. Their post that accounts had been suspended has been replaced with one stating they’ve received LL’s e-mail concerning the proposed solution. So they may yet announce that they are applying to join the programme.
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Suppose this conversation:
Hi, we would like you to be a third party provider.
You cancelled our accounts. Yes, we can do that. It’s in the TOS.
You stole our L$. Yes, we can do that. It’s in the TOS.
You changed the TOS and enforced it before it was in effect. Yes, we can do that. It’s in the TOS.
So you can un-cancel and give back our L$? Yes, we can do that. It’s in the TOS.
But I would like a reliable partner in my business. Oh, we can’t do that. It’s in the TOS.
Give me back my L$ first and then we discuss. We can’t do that. It’s in the TOS.
What fools would want to be Third party providers?
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I will note that, so far as I can tell, absolutely nothing prevents an authorized reseller from selling their L$ on the Lindex and then handing the money (minus a small fee, of course) to whomever handed them the L$ in the first place. Of course, most people would sell directly, but if you aren’t able to use one of LL’s payment methods…
They’re forbidden from directly buying L$ in the first place, but I wonder.
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It’s a little difficult to compare, because of fixed transaction charges, but the LindeX is currently selling at 247 L$/USD while VirWoX is selling at 240 L$/USD. That’s a 2.8% difference. Since I was spending GBP, and based my calculation on the close-of-trading rate quoted on Bloomberg, some of that difference might be down to the exchange rate VirWoX can get. It looks better than the rate I get for a USD payment on my card.
The recent history given for LindeX is remarkably stable. I find it hard to believe that Linden Labs are not intervening in the market.
As usual, there is a 4% spread between buying and selling on the LindeX, which is about the same as the variation over a day’s trading. Nobody is going to make money on the market.
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