Second Life L$ Authorised Reseller programme to close

On Monday, June 15th, Linden Lab announced the forthcoming closure of the Linden Dollar (L$) Authorised Reseller programme, which has been in operation for just over two years.

The programme was originally introduced in May 2013, after Linden Lab had, earlier that month, made changes to their Terms of Service (ToS) which meant that only the official LindeX was the only place where trading in Linden dollars would be allowed.

At the time of the change, the Lab stated their reason for the change was to better protect users from the risk of fraud. However, there was considerable speculation on whether the move was linked to a set of interpretive guidelines (PDF) issued by the US Department of the Treasury’s Financial Crimes Enforcement network (FinCEN). As I reported at the time the guidelines were issued, the suggestion was that insofar as the federal government was concerned, the Linden Dollar could be regarded as a virtual currency  a virtual currency (the Lab had “downgraded” it to a game token in 2010 within their ToS), and therefore potentially subject for more rigorous controls to prevent issues of fraud and money laundering.

However, whether or not FinCen’s guidelines were a trigger point for the Lab’s changes to the Terms of Service in 2013, the changes themselves did cause assorted problems for may users outside of the United States who wished to but L$, but who could not, again for assorted reasons, easily use the LindeX.

The Linden Dollar Authorised Reseller programme was a direct response to the problems users affected by the ToS changes were encountering. It allowed approved bodies to buy Linden dollars through the LindeX and then resell those L$ to users in a variety of international currencies and via numerous payment methods. However, in keeping with the May 2013 ToS changes, these Authorised Resellers were not allowed to buy back L$ from users or cash users out – such transactions would still have to go via the LindeX.

When it was introduced, the Authorised Reseller programme was supported by a wiki page, and was regarded by the Lab as a pilot programme – and its status as such has never changed over the last two years. Nevertheless, it proved to be popular; by early June 2013, just three weeks after it had been launched, some 29 resellers had been approved by the Lab as a part of the programme.

In announcing the closure of the programme, which will take place on August 1st, 2015, the Lab states:

Since then [the introduction of the programme in 2013], we have expanded the payment options for Second Life users, and today, you can easily purchase L$ in more countries than ever before, using a credit card, PayPal, or Skrill, which supports a wide range of payment methods. We’ve found that these options support the vast majority of Second Life users, and we have therefore made the business decision to close the Authorized Linden Dollar Reseller pilot program.

We are contacting program participants directly to detail the next steps for them, and they will have approximately six weeks to sell off their L$ inventory.

As of August 1, 2015, the Authorized L$ Reseller pilot program will be closed, and the LindeX will be the only authorized place to purchase L$.

While the announcement will probably lead to speculation and theories as to why the Lab is taking this step, the stated reason actually seems to be fair enough: when the changes were made to the Terms of Service in 2013, the loss of third-party exchanges for L$ purchases did impact users – but the Lab has, over the last two years, genuinely sought to offer more options by which users can make L$ purchases, all of which enjoy widespread use among Second Life users.

For full details on the closure and on how to buy L$ beyond August 1st, 2015 if you have relied upon a third-party authorised Reseller, please refer to the official blog post.