On Monday, July 1st, Linden Lab issued a blog post announcing important changes to how Second Life US dollar accounts are to be handled with regards to the Lab’s subsidiary, Tilia Inc (which the blog post officially introduces for the first time) and credit processing (cashing out) from Second Life.
The announcement caused a certain amount of confusion among users. As a result, a forum thread raising questions was started, and since the initial announcement, the Lab has been trying to address these, including starting a Tilia Q&A thread of their own, which has been subject to a number of updates.
Due to the continuing questions, and in support of the forum efforts to address them, on Tuesday, July 9th, the Lab announced a special town hall meeting will be held specifically to address concerns, questions and confusion relating to Tilia, its role in managing accounts associated with Second Life and cashing out US dollar amounts from the platform.
The meeting will take place on Friday, July 12th at 13:00 SLT. It will be attended by:
Grumpity Linden, Second Life Senior Director of Product.
Patch Linden, Senior Director of Product Operations.
The meeting will take place at the Town Hall meeting islands, and I hope to be able to record the meeting and produce a summary with audio after-the-fact.
The Town Hall meeting venue will host a special meeting on the upcoming Second Life dollar account changes, credit processing and Tilia – Friday, July 12th, 2019 at 13:00 SLT
In the meantime, the Lab will continue to try to respond to questions asked via the official Tilia Q&A forum thread – so do continue to keep an eye on this to see if any specific concerns you may have are addressed between now and the meeting.
Friend and fellow blogger, Vick Forcella contacted me at the end of October concerning some interesting items related to Linden Lab he’d uncovered in digging around a few places.
The first comes in the form of documents relating to a relatively new Linden Lab subsidiary company, and the second in a partially filed trademark.
The subsidiary company is called Tilia Inc., and at first glance it seems to be completely unrelated to the Lab, being referred to as being involved with ” Packaging Machinery”. However, an examination of the company’s papers will reveal it is registered at 945 Battery Street – the Lab’s headquarters, as a check on Buzzfile confirmed to me.
Tilia Inc appears to be a defunct corporate entity, first registered in 2002, which has been acquired by the Lab. This, and the further registrations of the name across several US states as a “foreign” entity (meaning the filing is by an existing corporate entity registered in another US state), tended to suggest the Lab might be using the company to leverage certain tax advantages – a common practice among corporations around the world. Further support for this appeared to come from the names of the directors: the Lab’s CFO, Malcolm Dunne, their Legal Counsel, Kelly Conway and, from outside of the Lab, Benjamin Duranske, founder of PayCom Consulting, and LeAnne Hoang, the Lab’s former Chief Compliance and AML Officer.
Companies registered at 945 Battery Street, the Lab’s HQ, via Buzzfile. Note Philip Rosedale’s “Coffee and Power” sitting in the middle – and its associated industry description!
Obviously one way to get more of a clue was to ask the Lab directly. So I did.
Tilia is a subsidiary of Linden Lab, focused on payments and the compliance work associated with operating virtual economies, and it will provide services for both Second Life and Project Sansar.
Peter Gray, Director of Global Communications, Linden Lab
Following my initial enquiry (which is not to say it is related to it), the list of senior personal at Tilia Inc., dramatically increased. The additional appointees comprise: Bjorn Laurin (Bjorn Linden), Vice President of Product (Blocksworld, Second Life and Sansar), Landon McDowell (Brandon Linden), Vice President of Operations and Platform Engineering, Jeff Peterson (Bagman Linden), Vice President of Engineering, Pam Beyazit, Senior Director of HR, and Peter Gray.
Tilia Inc is said by the Lab to be focused on the compliance work associated with operating virtual economies, and will provide services to “Project Sansar” and Second Life
The trademark, USTPO document 86374264, originally filed on August 22nd 2014, relates to the name of “Tilia”, which is described as, “Computer software, namely, electronic financial platform that accommodates multiple types of payment and debit transactions and the transfer of funds to and from others, in an integrated mobile phone, PDA, and web-based environment.” A further document located by Vick pertaining to the trademark application reveals even more information, and makes for interesting reading on its own.
What this all adds up to is still hard to determine. “Tilia” and Tilia Inc., might be totally coincidental; as such what follows might be pure unfounded speculation; then again, a lot of it also seems to hang together.
As indicated in June 2015 by Ebbe Altberg, the Lab has been focused on four areas of activity, one of which has been that of compliance (see the quote on the right).
This work appears to have been overseen by LeAnne Hoang, prior to her departure from the Lab in July 2015. More recently, the Lab has also transitioned to a new payment processor for credit and debit card payments, which may be related to this work.
Again the two – the compliance work and the new payment processor – could be entirely unrelated. However, given that “Project Sansar” and SL will both operate virtual economies possibly based on the same virtual currency, it would make sense for the Lab to develop a central transaction and payment system capable of supporting both. Doing so could reduce the complexities of managing two payment / transaction systems (or any least manage any exchange mechanisms between two separate currencies) and in managing updates to match evolving compliance and anti-fraud regulations and requirements. If so, could “Tilia” be the proposed name for this new service? But why run it under a separate entity? Why not simply run it under the “Linden Lab” umbrella? Is it a matter of compliance, as stated be Peter Gray in his response to my initial questions? Perhaps so.
Another option might be that the Lab be considering making the Linden Dollar and all its attendant services a pre-packaged solution / service they can offer to other companies wishing to operate a virtual currency, with Tilia Inc., as the nominal operating company for that service. After all, they have made much of their leadership in matters of virtual economies and compliance, so spinning it out and offering it to others might be a means of generating additional revenue, although admittedly, given the complexities potentially involved, this might be seen as a bit of a stretch.
As a believer in Occam’s Razor, and moving away from idle speculation, I can’t entirely let go of the idea that Tilia Inc., might be wrapped in matters of compliance and potentially a means of leveraging tax advantages.
After all, The Lab have made it clear that “Project Sansar” in particular will rely on generating the majority of its revenue through the sales of virtual goods and services. So, spinning out the systems and services that make this possible into a subsidiary registered in states with advantageous tax regulations might be a way for the Lab to reduce its tax exposure on those revenues.
Following Peter Gray’s reply to my original enquiry of a week ago, I have placed follow-up questions with the Lab, but have yet to receive a response. Updates will be forthcoming if a reply is received or should the Lab reveal more themselves.
And why “Tilia”? I would guess it’s to do with the fact that tilia is genus of trees also referred to as linden trees.
My thanks to Vick Forcella for doing much of the digging into Tilia Inc and “Tilia”, for passing the information to me, trusting me to blog about it, and for his patience as I chased down various information myself, sought answers to questions. Thanks also to Johannes1997 Resident for his input on US corporate tax activities.
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