Not very nice Linden Lab, not very nice

[Rommanno]

As you all know recently Second Life changed their TOS and sent letters out 3rd party exchangers demanding them to cease all Linden trading and remove ATM's immediatelly ignoring their own TOS rule of 30 day prior notice. Not only did they do a huge no-no in bussiness world screwed people over who they themselves led to believe that Second Life is a good place for their bussinesses, but they also did this overnight. This is the same, as if I would have a tenant and suddenly tell him/her to move out in thirty minutes. Not very nice Linden Lab. If they were an European company they would get sued over this, but I don't know much about laws in the US.

Whatever it is, it's clear that Linden Lab has lost a big portion if not all trust it had left as a bussiness. I think all land barons, creators, etc. if not leaving SL, should at least have a some contingency plan in place in case linden Lab pulls a stunt like that on them in a future.

[Lasher Oh]

Clearly they have forgotten or were never taught  the  'Do unto others as you would have them do to you' golden rule of life.

^L^

[Amethyst Jetaime]

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Rommanno wrote:

... but I don't know much about laws in the US.

 

 

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Maybe you should find out what the new regulations are before ranting about something you haven't a clue about.   Like it or not LL is a US company and must comply with US law. 

[Rommanno]

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Amethyst Jetaime wrote:

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Rommanno wrote:

... but I don't know much about laws in the US.

 

 

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Maybe you should find out what the new regulations are before ranting about something you haven't a clue about.   Like it or not LL is a US company and must comply with US law. 

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And do you yourself know much about Banking Secrecy Act or just trolling? That clarification didn't tell Linden Lab to ban those exchanges, it's just a course of action that Linden Lab took and it's probably the absolute worst one they could have taken.

[Amethyst Jetaime]

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Rommanno wrote:

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Amethyst Jetaime wrote:

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Rommanno wrote:

... but I don't know much about laws in the US.

 

 

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Maybe you should find out what the new regulations are before ranting about something you haven't a clue about.   Like it or not LL is a US company and must comply with US law. 

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And do you yourself know much about Banking Secrecy Act or just trolling? That clarification didn't tell Linden Lab to ban those exchanges, it's just a course of action that Linden Lab took and it's probably the absolute worst one they could have taken.

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Until recently I have worked in the financial industry for most of my career in jobs where I was required to know and keep up with US federal and state laws and be sure the financial services department I managed complied with them.  I was even the manager of methods and procedures for one company and wrote official procedures to make sure this happened throughout the entire company.  So I took the time to actually read the Treasury's guide on it  instead of just ranting and trolling about a conspiracy. 

LL was not forced to shut down the exchanges per say by the regulations,   however they are required to have and maintain absolute transparency in all transactions involving transmitting RL money or L's through SL  no matter what the source of that is, or face being held liable for any funny business that goes on with those exchanges. They can't do this when the money and L's are being transmitted to and from companies they have no control over.

You can't say that all TPE's never have their customers involved in money laundering and fraud, which these regulations address.  They are the favorite method hackers use to quickly cash out stolen L's and laundering money through them is easy.  There have also been a number of cases where people paid RL money for L's and never got them, which is fraud.

So while I grant that LL could have handled this better, I don't see where they had much choice as a business.  They can't ignore the practical impact of the law, to do so would have been irresponsible to not only their investors but us users as well.  If they did they'd risk having the government shut down any buying and selling of L's if they are not in compliance and consumers would not be able to buy anything and no SL business would have any way to sell their products.

SL is not going to be the only service that has to comply.  All companies that run exchanges of RL money for virtual currency that operate in the US must also comply.  So you probably will to see changes made by other on line gaming companies and virtual worlds that have virtual currency that can be bought and sold for RL money and allow TPE's to exist as well as services such as Bit Coin.  The fact is that laws and regulations regarding virtual currency are just now starting to catch up with the technology and we are apt to see even more regulation in the future not only in the US but by other governments as well.

[Perrie Juran]

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Amethyst Jetaime wrote:

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Rommanno wrote:

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Amethyst Jetaime wrote:

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Rommanno wrote:

... but I don't know much about laws in the US.

 

 

---

Maybe you should find out what the new regulations are before ranting about something you haven't a clue about.   Like it or not LL is a US company and must comply with US law. 

---

And do you yourself know much about Banking Secrecy Act or just trolling? That clarification didn't tell Linden Lab to ban those exchanges, it's just a course of action that Linden Lab took and it's probably the absolute worst one they could have taken.

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SL is not going to be the only service that has to comply.  All companies that run exchanges of RL money for virtual currency that operate in the US must also comply. 

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Notwithstanding their as usual terrible handling of announcements, the other reason LL is really getting bashed here is because LL is the first one to respond to the new rules.

If other companies had announced compliance first more people would have readily understood that they had no choice.*

Only LL would know how much scrutiny they are under and that also could be a reason for such quick compliance.

 

*ETA, because the Regulations (pops) are actually only "Guidance," they did have a choice.  They could have chose to challenge this in Court should they be charged with violating the actual laws as written.  That would be one lengthy and exspensive legal battle.

 

[Azanor]

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Amethyst Jetaime wrote:

So while I grant that LL could have handled this better, I don't see where they had much choice as a business.  They can't ignore the practical impact of the law, to do so would have been irresponsible to not only their investors but us users as well.  

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They have got choices: 

1. Develop your own regulations about 3rd party exchanges and force them to follow same transparency standarts you are supposed to follow.

2. Buy one of those exchanges operates out of US and give service to your Non US customers through it

3. Invest more into Lindex and expand its service methods.

In any case communicate with your customers and business partners better so they can make the adjustments they need to make too as well. 

There are many companies based in US but serving an international customer base. Being based in US is not an excuse for poor business practices. But it's their company to run. They can manage it the way they want, and people are free to choose where they put their money.

[Rommanno]

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Amethyst Jetaime wrote:

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Rommanno wrote:

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Amethyst Jetaime wrote:

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Rommanno wrote:

... but I don't know much about laws in the US.

 

 

---

Maybe you should find out what the new regulations are before ranting about something you haven't a clue about.   Like it or not LL is a US company and must comply with US law. 

---

And do you yourself know much about Banking Secrecy Act or just trolling? That clarification didn't tell Linden Lab to ban those exchanges, it's just a course of action that Linden Lab took and it's probably the absolute worst one they could have taken.

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Until recently I have worked in the financial industry for most of my career in jobs where I was required to know and keep up with US federal and state laws and be sure the financial services department I managed complied with them.  I was even the manager of methods and procedures for one company and wrote official procedures to make sure this happened throughout the entire company.  So I took the time to actually read the Treasury's guide on it  instead of just ranting and trolling about a conspiracy. 

LL was not forced to shut down the exchanges per say by the regulations,   however they are required to have and maintain

absolute transparency

in all transactions involving transmitting RL money or L's through SL  no matter what the source of that is, or face being held liable for any funny business that goes on with those exchanges. They can't do this when the money and L's are being transmitted to and from companies they have no control over.

You can't say that all TPE's never have their customers involved in money laundering and fraud, which these regulations address.  They are the favorite method hackers use to quickly cash out stolen L's and laundering money through them is easy.  There have also been a number of cases where people paid RL money for L's and never got them, which is fraud.

So while I grant that LL could have handled this better, I don't see where they had much choice as a business.  They can't ignore the practical impact of the law, to do so would have been irresponsible to not only their investors but us users as well.  If they did they'd risk having the government shut down any buying and selling of L's if they are not in compliance and consumers would not be able to buy anything and no SL business would have any way to sell their products.

SL is not going to be the only service that has to comply.  All companies that run exchanges of RL money for virtual currency that operate in the US must also comply.  So you probably will to see changes made by other on line gaming companies and virtual worlds that have virtual currency that can be bought and sold for RL money and allow TPE's to exist as well as services such as Bit Coin.  The fact is that laws and regulations regarding virtual currency are just now starting to catch up with the technology and we are apt to see even more regulation in the future not only in the US but by other governments as well.

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Correct. Although I don't believe that EU governments will follow suit with this. But Linden Lab could have considered adding alternative methods of payment besides PayPal, before cutting all these people off. Now they're just being reckless, and many people will leave because of this and sales inworlds and on the Marketplace will go down for everybody. :-(

When it comes to fraud however, SL would just recoup the losses from the exchange regardless if they were using Risk API or not, this has been the case for years now. And apparently fraud isn't that high in SL as even exchanges that weren't using Risk API were doing pretty well, all these years. I guess the bigger issue is with the US government here.

[Azanor]

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Perrie Juran wrote:

*ETA, because the 

Regulations (pops)

are actually only "Guidance," they did have a choice.  They could have chose to challenge this in Court should they be charged with violating the actual laws as written.  That would be one lengthy and exspensive legal battle.

 

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These are not few month's old laws. Fin-Cen just publishes a guidiance now because the virtual currencies are getting greater attention lately. If L$ was really used for criminal activities by the real world crime organizations LL would have been contacted by agencies long before these guidiances. You are correct about these publications not being the law. As far as I know no major players in virtual currency world are taken to the court yet. And just like you mentioned it wont be clear how the law applies till it's challanged in court. It's understanable that LL doesnt want to take further risk, but there are many other ways to handle this issue. 

This is just LL being LL. After ten years they are still acting like being run by college kids instead of a multimillion dollars international company. This was more acceptable when they first got started because what they were trying to achive had an experimental quality, but after all these years one would expect it to become a solid company. 

[Perrie Juran]

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Azanor wrote:

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Perrie Juran wrote:

*ETA, because the 

Regulations (pops)

are actually only "Guidance," they did have a choice.  They could have chose to challenge this in Court should they be charged with violating the actual laws as written.  That would be one lengthy and exspensive legal battle.

 

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These are not few month's old laws. Fin-Cen just publishes a guidiance now because the virtual currencies are getting greater attention lately. If L$ was really used for criminal activities by the real world crime organizations LL would have been contacted by agencies long before these guidiances. You are correct about these publications not being the law. As far as I know no major players in virtual currency world are taken to the court yet. And just like you mentioned it wont be clear how the law applies till it's challanged in court. It's understanable that LL doesnt want to take further risk, but there are many other ways to handle this issue. 

This is just LL being LL. After ten years they are still acting like being run by college kids instead of a multimillion dollars international company. This was more acceptable when they first got started because what they were trying to achive had an experimental quality, but after all these years one would expect it to become a solid company. 

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You are correct that the Laws are not new but Businesses wait for guidance from Fin-Cen to see how the Executive Branch intends to apply the laws.   I had forgotten all about this until it just came up again but actually I had started a thread about this several months ago when this "Guidance" was more in the "Proposal" stage.

Now, as far as the Exchanges go, I'm going to have to say that their own Legal Counsel (may have) dropped the ball.  And if any of them are operating in International Currency Markets with out legal Counsel then they are taking huge huge risks.  The Legal Counsels for the TPE's should have seen this coming and have advised the TPE's of it.

I don't think many people would argue that when it comes to publicity and public relations often times LL is its own worst enemy.  LL's Legal Counsel may very well have presented the Lab with several options and they chose to take the one that was safest for them.  I can't really blame them for this.  It is a sad reality that you can win a legal battle but still lose everything that you have.

On a final note, I Am Not A Lawyer.  Nor am I an Employee or a Shill or a Fan Boy for LL.  I am simply a person who is very interested in Virtual Worlds and Virtual Reality.  I am just saying things as I see them.  It does not necessarily mean that I agree with them.

[Lexi Zelin]

yeah.. virvox sent me a message telling me to remove the atms i have outside my store so sad..

[Madeliefste Oh]

Bring back the Ginko bank. They gave you 10% interest a week :smileylol:

[Mileva Milev]

A lot of people outside US can not use LindeX or verify their age!

After SL stoped the secure API for 3rd parties to pay out money and gave a 30 day deadline to all 3rd to leave SL, the most 3rd closed their SL-services, or will do it in the next hours.

Whatever you think that credit card or PayPal will do it: It does not work for most Europeans and Asians and lot of people outside US to pay or get money from/by LindeX !!!

And this will happen:

1st soon a lot of people can not pay their rentals
2nd landowners give up their land
3rd new residents will not find a way to buy things and
4th creators will sell less and create less
5th new residents will find less fun ...
2525 ... SL will have some US residents and a few lucky outside residents who will think: "What was the fun here? ..."

Many people HAD to use 3rd, because there was no other way. MOST of them will be lost soon as SL-customers in any way.

LindeX has to rework their payment methods QUICKLY or bring back 3rd again!!!

[Anthonius Berkmans]

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Mileva Milev wrote:

A lot of people outside US can not use LindeX or verify their age!

 

After SL stoped the secure API for 3rd parties to pay out money and gave a 30 day deadline to all 3rd to leave SL, the most 3rd closed their SL-services, or will do it in the next hours.

 

Whatever you think that credit card or PayPal will do it: It does not work for most Europeans and Asians and lot of people outside US to pay or get money from/by LindeX !!!

 

And this will happen:

 

1st soon a lot of people can not pay their rentals

2nd landowners give up their land

3rd new residents will not find a way to buy things and

4th creators will sell less and create less

5th new residents will find less fun ...

2525 ... SL will have some US residents and a few lucky outside residents who will think: "What was the fun here? ..."

 

Many people HAD to use 3rd, because there was no other way. MOST of them will be lost soon as SL-customers in any way.

 

LindeX has to rework their payment methods QUICKLY or bring back 3rd again!!!

 

 

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while paypal is not cheap it is available in a lot of countries especialy in europe with localised services in many european countries.

also most of the costs of paying trough paypal is carried by LL only when you cash out do you pay a fee but because Lindex has lower fees this ends up pretty close to the same as trough 3th parthy exchanges.

 

Only argument is that LL is taking away freedom of choice

[Kahlie Niven]

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Anthonius Berkmans wrote:

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Mileva Milev wrote:

A lot of people outside US can not use LindeX or verify their age!

...

LindeX has to rework their payment methods QUICKLY or bring back 3rd again!!!

 

 

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...

Only argument is that LL is taking away freedom of choice

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LL could, at least, propose some alternatives to Paypal, for example Skrill/Moneybookers or Neteller. I don't think it's that hard to find partnerships with them.

As a personnal testimony, this decision, by killing the use of VirWox, also almost kills my business. I don't worry much I'll find my customers elsewhere than on SL, That's just 800,000 L$/mth of transactions that will disappear from SL, no biggies.

1st they banned gambling, then they had stupid policy about estates, then they bought xstreet to make MarketPlace, which killed all inworld businesses. After having dumb stratics for 3 years, they now ban 3rd party exchange companies....I wonder how long before they ban all the residents...after all, no residents, no issues !

The Linden Labs definitely have suicidal tendencies, and metrics are here to testify about the movement :

Second Life metrics

 

Kahlie Niven,

KA Radio CEO and owner

 

 

 

 

 

[Madeliefste Oh]

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Kahlie Niven wrote:

 

As a personnal testimony, this decision, by killing the use of VirWox, also almost kills my business.

 

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Explain...

[Kahlie Niven]

Pretty simple, 2 example of advantages provided by third party like virwox :

- It was allowing me to exchange my L$ to Euro over neteller and skrill, instantaneously, didn't have to wait weeks for this..and when your business on SL forces you to pay 500 € of bills monthly, believe me, you don't want to wait for your income for weeks.

- Secondly, because of all the fees : LL's fee, Paypal's fee, currency exchange fee... overall, all of these fees cost me about 100 € per month. If I can avoid them then I will (with direct payments overt the web for example).

[Madeliefste Oh]

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Kahlie Niven wrote:

Pretty simple, 2 example of advantages provided by third party like virwox :

- It was allowing me to exchange my L$ to Euro over neteller and skrill, instantaneously, didn't have to wait weeks for this..and when your business on SL forces you to pay 500 € of bills monthly, believe me, you don't want to wait for your income for weeks.

- Secondly, because of all the fees : LL's fee, Paypal's fee, currency exchange fee... overall, all of these fees cost me about 100 € per month. If I can avoid them then I will (with direct payments overt the web for example).

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You don't want to wait maybe, but waiting is not something that is going to kill your business, it's just a matter of planning more in front.

When you pay about 100 € per month in fee, and let's say the fees are 10% (which is way too high, it shall be more around 7% but still let's take that 10% as an amount to calculate with), Then your income must be around 1000 euro a month. 

Your costs are 500 € + 100 € a month, so you still have a profit of € 400 euro a month (520 usd).

 

That might be a bit lower then you were use to, but it is not killing your business.

 

[Czari Zenovka]

This is reminiscent of the uproar when LL began charging VAT. Some Europeans sold off their land and/or left SL, but it eventually died down and new users are likely not aware that LL used to not charge VAT.

 

[Kahlie Niven]

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Madeliefste Oh wrote:

You don't want to wait maybe, but waiting is not something that is going to kill your business, it's just a matter of planning more in front.

When you pay about 100 € per month in fee, and let's say the fees are 10% (which is way too high, it shall be more around 7% but still let's take that 10% as an amount to calculate with), Then your income must be around 1000 euro a month. 

Your costs are 500 € + 100 € a month, so you still have a profit of € 400 euro a month (520 usd).

 

That might be a bit lower then you were use to, but it is not killing your business.

 

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No, you're wrong about the amounts :

My income in sl is about 700,000 - 900,000 l$ per month ... that means about 2,100 € (~ 2,750 usd)

As the job is official (meaning, it's subject to taxes) I have to pay 25% of the income into social security contributions (yeah guess my country -.-), so : 525 €

Then my costs : 500 €

 

Remaining a net profit : 1,075 € per month .. for a full time job ... and believe me at this level, 100 € more or 100 € less makes a big difference, so if you can save them, then you do.

I didn't say it will kill my business...I said it may kill it inworld (I'll move it elsewhere, to a place where L$ won't be involved).

 

About planning it more in front, yes, this is what I urgently had to do today, as my next large bills will take place the 18th, 19th and 20th. And it won't even be enough, so I'll run short of money and my bank will be very happy.

At least, Linden Lab could have done it in two steps, with a month of delay, to allow merchants to adapt to the new rules...the way how they did it is just rude toward their customers, toward the community base; toward the people that make SL alive.... I'm now not even astonished when I've heard that avination has noticed a boom of newcomers.

 

As I said... LL has been killing itself for years, they now just wanted to accelerate the process.

 

 

 

 

[Pamela Galli]

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Kahlie Niven wrote:

 

 

 

Remaining a net profit : 1,075 € per month .. for a full time job ... and believe me at this level, 100 € more or 100 € less makes a big difference, so if you can save them, then you do.

 

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That is less than ten percent decrease in profit. Plus that should actually reduce your taxes since it is an expense. 

 

[Madeliefste Oh]

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Kahlie Niven wrote:

Remaining a net profit : 1,075 € per month .. for a full time job ... and believe me at this level, 100 € more or 100 € less makes a big difference, so if you can save them, then you do.

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You are right, at this level a decline of 10% of your income is a lot. I'm really sorry that it works out this way for you.

 

But there is something I still don't get. How it is possible that you will have a loss of 100 € a month?

Till this new Tos arrived the only sounds I heard from people cashing out at TPE's was: the speed of service is it worth to me to get a slightly lower price for my L$.

Which exchange service gave a higher price for your L$ and was still able to make a profit?

[TJ Jelasco]

So why not simply have a Second Life Gift Card?

 

TJ

[Julie Steamer]

I agree TJ, that would be the simplest solution. Something along the lines of what other games do like World of War Craft for example.. linden labs would make a fair bit of capital doing that.

As things stand now, and i have seen this stated already in this blog, residents will not be able to pay for their land, and consequently land owners, sim owners, will end up with no customers.

Creators will lose out because so few will be able to buy..

Regardless of any State regulations, linden lab has not made any apparent effort to retain it's customer base.

There is more than one way to get things done and linden labs is missing the boat!!

 

[Kahlie Niven]

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Madeliefste Oh wrote:

...

Which exchange service gave a higher price for your L$ and was still able to make a profit?

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That desserves an explanation, thats right. As currency exchanger, I was using VirWox, and as intermediary to my bank account, I was using Skrill.

Let's consider these data (based on my last transactions) :

Amount to cash-out in a month : 700,000 L$, assuming it's done on a single shot per month.

EUR/USD rate : 1,31

USD/SLL rate on Lindex : 248

EUR/SLL rate on VirWox : 326

Lindex option :

Lindex charges 3.5% of commission on SLL to USD.

Xfer from lindex to paypal europe costs me 2% of the amount+0,25€ (+ 1 usd to LL)

Paypal then charges 40 pips (4%) of commission on currency exchange from USD to EUR.

Xfer from Paypal to bank account is free of charge (happily).

==> A net worth of ~ 2016 € after 10 days (2x5days).

VirWox option :

VirVox charges 3.9% of commission minus a refund that depends on volume, with 700,000 L$ traded monthly I benefit(ed) a 40% refund.

Xfer from VirWox to Skrill costs 1 €.

Xfer from Skrill to my bank account costs 1,80€, whatever the amount.

==> a net worth of ~ 2110 € after some few hours.