Tilia Inc and Second Life: town hall summary and video

Logos © and ™ Linden Lab and Tilia Inc.
On Friday July 12th Linden Lab hosted a town hall meeting on the subject of Tilia Inc., and forthcoming changes will affect those who have a US dollar (USD) balance associated with their Second Life account, and those who transfer US dollar amounts out of Second Life.

The session involved Grumpity Linden (Senior Director of Product) and Patch Linden (Senior Director of Product Operations), and was moderated by Brett Linden, Head of Marketing for Second Life.

The following is a summary of that meeting, which addressed questions asked both through the official Tilia Q&A forum thread and during the meeting itself concerning Tilia and the announced changes.

Questions were selected on the basis of how broad an audience they might affect. Numerous questions of an account-specific nature, or applicable to specific country circumstances had been received (and were put forward at the meeting); however, due to the very specific nature of any answers relating to them, these were deferred with the recommendation that all such specific questions such be filed with support.

It was also noted that questions will also continue to be addressed through the official Tilia Q&A forum thread going forward.

A note on the structure of this summary

The format of the event – including questions being asked multiple times, and  / or not being grouped together means that this is not a full transcript of the session.

Instead, I have attempted to gather questions into logical topic headings and provide bullet-points of responses, together with direct quotes from either Grumpity or Patch where I felt they might offer greater clarity.

In addition, the video of the event ad recorded by Peetie Auer of SL4Live – TV is embedded at the end of this article, for those who would prefer to watch it. In addition, topics and questions in recorded in this summary include time stamps to the video. This will open the video in a separate browser tab and at the relevant point in the meeting, to again allow responses to be heard first-hand.

My thanks to Peetie for agreeing to my use of the video.

Summary: How Do the Tilia Changes Affect YOU?

If you have a US dollar balance associated with your Second Life Account on August 1st, 2019, or if you add a US Dollar balance to your Second Life account on or after August 1st, 2019 (e.g. by converting Linden Dollars to US dollars via the LindeX):

You will be required to consent to the Tilia Terms of Service.

In addition, if you wish to credit process all or any part of that US dollar balance (that is, transfer it out of Second Life to PayPal or Skrill or another supported method) on or after August 1st, 2019, and have not already provided personal information to Linden Lab as a part of the credit process:

You will be required to provide personal information as outlined in Linden Lab’s July 1st blog post and listed in the Tilia FAQ.

[Video: 46:05-47:00]

(Note: you do not have to provide personal information if you never transfer funds out of a US dollar balance to an account outside of SL – you will only need to agree to the Tilia Terms of Service.)

If you only buy L$ amounts and do not have a US dollar balance associated with your Second Life account on or after August 1st, 2019:

You will not have to consent to the Tilia Terms of Service nor will you be required to provide any additional information to Tilia.

 

If you have a US dollar (USD) balance associated with your Second Life account on or after August 1st, 2019 you must consent to the Tilia Terms of Service. In addition, if you transfer out all or part of that USD balance on or after August 1st, 2019 you will be required to provide personal information in order to do so (see the July 1st official Tilia blog post and the Tilia FAQ for details on the required information). Note: the USD balance given hre is for illustrative purposes only

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What Is Tilia Inc?

[Video: 2:01-3:28]

Tilia Inc., is a wholly-owned subsidiary of Linden Lab. It was formed in 2014, focused on payments and the compliance work associated with operating virtual economies. As a part of this, it will provide services for both Second Life and Sansar.

Specifically in reference to Second Life, Tilia Inc., will, from August 1st, 2019, take over the management of all US dollar (USD) account balances user may have associated with Second Life. As such, it is central to the Lab’s work in seeking federal and state registration as a US Money Transmitter a form of regulated Money Service Business – MSB) and to comply with all US laws regarding the movement of money. This had been a stated goal within the Lab pretty much since Ebbe Altberg joined the company as CEO.

Note: while it is not relevant to this meeting or how users’ USD account balances are managed, I have written (and speculated) more broadly about Tilia Inc., in Tilia – a further look and a little more speculation.

The “Tilia Account” and “Tilia Wallet” / “US Dollar Wallet”

[Video: 3:30-4:50]

Two terms that have caused confusion amount users are “Tilia Account” and “Tilia Wallet” / “USD Wallet”.

  • The Tilia Account is the mechanism that will be used, from August 1st, 2019 to manage all US Dollar balances associated with Second Life (viewed via Account > Account Summary on your Dashboard at secondlife.com) and for managing transferring US dollar amounts from Second Life (viewed via Account > Credit Process on your Dashboard at secondlife.com).
    • You are effectively logged-in to it when you log-in to your Second Life account at secondlife.com. There is no separate “Tilia log-in” required.
  • The Tilia Wallet  / US Dollar Wallet is, in simple terms, the US dollar balance associated with a Second Life account.
    • By default all “real money” balances (referred to as fiat money) held on a Second Life account is denominated in US dollars (USD).
    • Cashing-out from Second Life (referred to as credit processing) is expressed in US dollars, but can be converted to local currency by your preferred payment option (e.g. PayPal).

Does Tilia Affect Those Who Only Buy and Use Linden Dollars?

[Video: 11:44-12:16 – see also Linden Dollar / Direct Payment Questions, below]

  • No.
  • There is no need to provide any additional information to Linden Lab for purchasing L$.
  • Users can still purchase L$ amounts exactly as they have done prior to the August 1st, 2019 changes – through the viewer, via the Second Life LindeX web page, using credit cards and or other recorded payment options associated with their account.
  • Users are only affected if users have US Dollar balances, on or after August 1st, 2019, and / or who wsh to process credit their USD balances out of SL.

The changes specifically apply to USD credit processing and there’s no impact on the routine purchase of Linden Dollars we don’t need your ID we don’t need your sisters maiden name we don’t need your first-born and don’t even need a blood sample. You will continue to buy Linden Dollars as you did before.

– Grumpity Linden [video: 11:44]

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Tilia Terms of Service

[Video: 7:17-9:00]

Only those who have a USD wallet [balance] need to accept the Tilia Terms of Service and if you are one of those people then you will see the Tilia Terms of Service and [you will] need to accept them when you log into your account on the web.

– Grumpity Linden [video: 7:39]

How do users with US Dollar balances on their account consent to the Tilia Terms of Service? – By logging-in to their account via the secondlife.com website.

What if a user doesn’t want to consent to the Tilia Terms of Service?

So if you don’t have a USD balance and you don’t plan on having a USD balance and you will not sell Linden Dollars to acquire a USD balance, you don’t need to do anything. You will not be required to accept the terms of service and literally nothing changes.

If you do currently have a USD balance and you don’t want to accept the Tilia Terms of Service, you need to basically get rid of it; you need to either complete a process credit of your entire USD balance before August 1st, or spend that USD balance in Second Life. You can buy Linden [Dollars], pay for land, pay for a Premium membership etc. If you have a USD balance come August 1st, you will need to accept the Tilia Terms of Service.

– Grumpity Linden [video: 8:13]

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Lab announces Tilia town hall event

Logos © and ™ Linden Lab and Tilia Inc.

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.

Related Links

Tilia – a further look and a little more speculation

Logos © and ™ Linden Lab and Tilia Inc.

Note: this article is about Tilia Inc., as a business. It is not about the Tilia and how USD dollar balances and cashing-out from Second Life will be handled. If you wish to comment on those subject please refer to:  Linden Lab announce important Second Life account changes and comment there. Thank you.

On Monday, July 1st, Linden Lab announced important upcoming changes related to Second life accounts and credit processing, which linked to their subsidiary company, Tilia Inc. Full details of these changes can be found in the Lab’s official blog post: Important Changes to your Second Life Account – Introducing Tilia, which I also covered in my own post, Linden Lab announce important Second Life account changes, which includes additional links to the Lab’s comments posted in reply to questions on the forums.

But what exactly is Tilia Inc.?

Well, for a start, Tilia Inc isn’t actually something new – it’s been around in relation to the Lab since 2014 / 15; in fact, Second Life users might actually already be aware of it without realising it, as the Tilia Inc., logo appears on the SL web pages related to L$ account purchases (Tilia also drives elements of Sansar accounts as well).

In describing Tilia Inc., in the blog post noted above, the Lab give a fairly basic description of company’s function::

A subsidiary of Linden Lab that offers certain financial services to the Second Life community and helps Second Life comply with U.S. laws and regulations.

This is actually only a part of the story – the part that affects Second life users; there is more, some of which I speculated about when first writing about Tilia almost five years ago in November 2015 – see Linden Lab and Tilia Inc. – speculations on the Lab’s new subsidiary – and which would now seem to be correct.

That article came about as an extension of investigations fellow Second life user Vick Forcella, had started before punting things over to me to build on his work. In the course of my digging, I spoke with Peter Gray, who was then the Director of Global Communications at Linden Lab, and while he didn’t give too much away at that time, he did say something that resonated with me as I speculated about what Tilia Inc might hold for the future.

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, former Director of Global Communications, Linden Lab, November 2015

Back in November 2015, two things in particular struck me about Peter’s comment.

The first is pretty straightforward: Tilia Inc., was, and would remain, central to the Lab’s work in seeking federal and state registration as a US Money Transmitter and to comply with all US laws regarding the movement of money. This had been a stated goal within the Lab pretty much since Ebbe Altberg officially joined the company as CEO.

Secondly, Peter’s statement struck me as interesting in that its structure seemed to suggest that supporting Second Life and Sansar (then still “Project Sansar”) was part of, but also separate to, the overall goal of presenting Tilia as an entity focused on providing a robust payments and compliance system for operating (and managing) virtual economies to third parties.

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.

– Part of my speculations, November 2015

Reading the Tilia Inc website, it seems that this is what Linden Lab plans to do – the main difference being that Tilia is geared to work with any “virtual token”, not just the Linden Dollar. Not only does the home page promote the company as a “solution provider”, so to speak, but it also includes a form by interested companies / organisations can register their interest with the Lab.

The Tilia Inc., home page promoting the company as a virtual economy solution provider to other businesses

(I’ll only say in defence of my linking Tilia and the Linden Dollar as the hip in 2015 was in part due to the Lab at that time hoping to use the Linden Dollar with Sansar, so it seemed logical to present they would offer it to others as part of the overall package.)

Some may well be upset at the idea of LL spinning off a business entity “at the expense of Second Life” (even though Tilia does and will have a bearing for both SL and Sansar, as noted). However, as noted in the quote above, it does have potential. There is already much more talk today about virtual currencies and economies  – notably focused around blockchain systems (such as Etherium), and the Lab does – as noted – have 16 or so years of running a virtual economy at scale and with users cashing-out up to US $65 million a year. Combine this with Tilia’s US-wide certification as a recognised Money Transmitter, and the Lab could have a robust business platform to offer clients.

Of course there are risks involved, such as the realities of this new market and how long it might take to grow, how LL might fair in the face of competition like decentralised blockchain system should these reach a similar level of certification, how much of any potential market LL might corner, etc. However, none of these mean the company shouldn’t necessarily try. Were Tilia prove to be successful over time, it could provide Linden Lab with an alternative revenue stream, possibly allowing them to do something else Ebbe Altberg alluded to in his Meet the Lindens session at SL16B: reduce their margins around SL and possibly lower fees.

But even if this doesn’t pans out, Tilia Inc., still means that LL are in compliance with US laws regarding money handling across state lines and borders, and so can continue to offer users the ability to generate and cash-out their own revenue through Second Life (and Sansar).

Which perhaps -for now – just leaves the question, ‘Why “Tilia”’? Well, possibly because, as I also noted back in 2015, tilia is genus of trees that encompasses linden trees.

Tilia Inc., and forthcoming Second Life account changes

Logos © and ™ Linden Lab and Tilia Inc.

Update, July 12th: this article has been updated to reflect comments made at the July 12th ton hall meeting at which Tilia Inc., and its role with regards to Second Life. A summary of that event, with audio extracts and video will be available in this blog soon.

Update, July 2nd: Linden Lab have started a new forum thread designed to directly address questions. Answers to questions will be placed in the original post in the thread to save having to scroll through question. The new thread can be found here: Official Tilia Q&A Forum Thread.

Update: some 90 minutes after this article was published, Linden Lab issued a further forum post on the subject. Among other clarifications, this further reiterates that L$ purchases, L$ balances, use of L$ to pay tier or Premium fees will all not be affected by these changes. 

Also, as clarifications are still being given, some of the wording in this blog post may be revised to match LL’s feedback so as to maintain the accuracy of the information given here. However, do please keep an eye on Lab posts to the forum thread, as additional information, separate to the points I’ve highlighted below may also be given.

On Monday, July 1st, Linden Lab issued a blog post announcing important changes to how Second Life 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.

Tilia Inc is a wholly owned subsidiary of Linden Lab, which was established in 2014/15, and focused on payments and the compliance work associated with operating virtual economies. Since its formation, the company has been involved in becoming a registered Money Transmitter throughout the United States, and many SL and Sansar users may have had some awareness of its existence as the Tilia Inc., logo appears on both the SL and Sansar web pages related to L$ account purchases and Sansar account management.

The blog post issued by Linden Lab, Important Changes to your Second Life Account – Introducing Tilia, should in particular be read in full and carefully noted by anyone who currently withdraws funds from Second Life through the credit process mechanism. This following is merely a short summary of the key points:

  • On August 1st, 2019, Tilia Inc., will assume responsibility for managing users’ USD denominated accounts, which will be referred to as their Tilia Account.
  • This means that users with US Dollar accounts and / or who cash-out (“credit process”) money from Second Life, will be required to agree to the Tilia Terms of Service and Privacy Policy. Doing so will automatically create a Tilia Account that will be associated with the user’s Second life account and use the same user name and password.
  • Most importantly: users wishing to process a credit – that is, withdraw money from Second Life via their US dollar account – after August 1st, 2019 must be prepared to supply the following information directly to Tilia Inc: name, address, date of birth, and social security number (or government-issued identification for non-US citizen).
    • Note that if you have previously supplied this information to Linden Lab, you may still have to re-supply it to Tilia Inc.
    • This information should only need to be supplied once, and will be retained on file by Tilia Inc., (as is currently the case through Second Life at the moment)
    • Some users may be required to provide additional information to complete a transaction.
    • Again, only those cashing out of their USD balance are required to meet the ID verification requirements.
  • These changes should not impact the average time it takes for credit to be processed (around 3-5 working days) for most SL users, once the required identification documentation has been verified.
  • The fees for inactivity mentioned in the blog post, etc., are still TBD, but again, they only apply in cases where USD have been cashed out, but the account has been dormant (i.e. no cash-out / no logging-in) for 12+ months. They do not affect L$ balances.
  • These changes do not impact or change the purchase and use of Linden Dollars with Second Life or on the Marketplace. So you do not need to provide personal information in order to buy L$.
  • Additional information can be found in the Lab’s official Tilia Inc FAQ.
From August 1st, 2019, US dollar balances associated with Second Life will be handled by Tilia Inc.

The blog post has already led to a growing forum thread on the matter, which voices some genuine confusion on matters, coupled with no small amount of misunderstanding. This prompted the Lab to add further clarification, and additional replies many be forthcoming from LL over the next day or so to try to address additional concerns / answer further questions. Note that I cannot address specific concerns or answer questions posted to this blog, as I do not represent Linden Lab.

As an aide, I first wrote about Tilia Inc., almost five years ago. At that time, I lot of what I had to say was highly speculative. However, there is now more to say and consider – but to avoid conflating my commentary about Tilia Inc., with news of this announcement, I’ll leave that to a separate blog post.

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Linden Lab and Tilia Inc. – speculations on the Lab’s new subsidiary

Logos © and ™ Linden Lab and Tilia Inc.

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 (remember that name).

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!
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,” Peter Gray, the Lab’s director of Global Communications said in answer to my initial questions, “and it will provide services for both Second Life and Project Sansar.”

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.

"Tailia" and Tilia Inc appear to be geared to providing virtual currency and related services to both "Project Sansar" and Second Life
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. What follows is pure speculation, which should not be taken to mean it’s what I believe to be the case; rather it is a collection of thoughts which have been bouncing around. complaince quote

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.

Continue reading “Linden Lab and Tilia Inc. – speculations on the Lab’s new subsidiary”