Something I don't quite understand.

[ImaTest1488314069]

Ok, forgive, but this will be a long winded post, again. Also, please bare with me while I try and explain what it is I don't understand. Thanks.

Firstly, I have read every single post, thread and discussion on this topic on the forums. I have not skipped a single one. I have read countless other posts, discussions, blogs and such on other websites too. That said, I am clearly missing something.

I understand most of the complaints about this new TOS. I may not agree with all of the complaints, but I do believe I understand all that I have read, pretty well. Except one complaint that is troubling me and I cannot for the life of me find an actual answer. So while I appreciate any and all input and I won't tell people get out of my thread :p I will ask that if you have personal experience it would probably better answer my question than anything or anyone, else.

I have seen quite a few people, not just here, complain about money they are now out. Money that is sitting, basically in limbo with these exchanges. I have not yet seen one person explain why the money is still sitting in limbo. I have also not seen one person explain why they are angry at the lab, or worse angry at people who might support some of the lab's recent changes. In an effort to basically lay the blame, squarely on the shoulders of the lab. I understand why they are angry about the changes, yes. I understand that fully. I don't understand why money the exchanges are holding onto, is 100% the responsibility of the lab, though.

Now, I do get that the money would not be sitting in limbo if there was not a halt order in place. Please don't attribute my ignorance on this to that, it's not the case. I do get that. What I don't understand is why people aren't angry with the exchanges. Why people are not demanding they return those lindens stuck in limbo back to the proper account. Why people are saying it's all the lab's fault. It's pretty clear to me that while people may not like the changes made, they have been made. The halt is in place. The lab is telling those exchanges to cease. It stands to reason that any money sitting in there that was waiting to be paid out, ought to be returned to their rightful owners, right? Or am I really that daft and that's not how it works?

I have read a few people very, very angry about being out money, or losing money, because of this halt. When, as of yet, I don't believe anyone should be out any money, except those who run the exchange, perhaps. Well, in their fees anyway, since now they're out 24+ hrs of customers. But no resident that uses the exchanges ought to be out anything, yet. That's not to say people won't be, being forced to use the lindex. But that's an entirely different topic, tho related, still different. What money have people lost? Why are the exchanges holding onto money? Why is there money left in limbo at all? Why aren't people who paid out to these exchanges, which from what everyone has said is a relatively instant payout, getting their money? If these exchanges offer faster delivery, there should be NO money in limbo, period. There should be NO customers out money, yet. Yet being a very key word, the key word, even.

So, can someone explain that part please? As I said, I do understand everything else and I'll reserve my opinion on the entire matter for another thread. My concern is with this talk of people being out money, or having lost money, since this new policy was put in place. What money? And even more importantly, WHY are people out money?

I'm not being argumentative, I just want to understand. I've been able to understand everything else just by reading, except this, because no one has answered the question yet.

[Jadeclaw Denfu]

The problem is:

Customers of these Third Party Exchanges (TPEs), that had acquired or deposited L$ there, but haven't transferred these L$ into their SL-accounts. Now most TPEs have ceased trading in L$, including transferring existing L$ onto SL. That money hangs in the air, as these TPEs also stopped converting L$ into real money (US$, EUR,etc.). Now the only way to recoup that money is possibly through legal proceedings. Which in turn is only useful, if we talk about serious amounts of money. If it is only about a few hundreds of L$, it is better to write that off, it is just not worth the hassle. (US$1,-- ~ L$250,-- / EUR1,-- ~ L$310,--)

Luckily I got my money out of a TPE just before that one stopped trading/converting L$. Phew.

For me, the termination of the TPEs means additional effort and cost to get money into SL, I have to get a creditcard (EUR10,-- extra a year), I have to charge it (EUR1,-- per recharge), while with the TPE, I simply could use bank transfer (zero cost) and the exchange rate was close to LindeX.

 

 

[Trinity Yazimoto]

well i still doesnt understand..

why if it s supposed to be soooo faster than lindex, money is pending in the air?....

Pp doesnt stop to claim that when they use these TPE, they get their money right away or in the next 24 hours...ive seen posts where sm1 said it was almost instantanely...some saying it was done within less than one day.

and now, it seems that pp are saying that money has to be pending before the trade is done....

im like Ima... i dont understand this aswell.. like i dont understand a lot of other things from both sides in this all mess...

And as for to complain about the money now pending... why not complain directly to the ones who are holding the money for now ?

[Dresden Ceriano]

I don't really understand how all of it works, but from what I gather, if LL had given them a heads up they could have stopped taking in L$ and let whatever L$ that were in their system sell out.  But since LL cut them off cold, they can't sell those L$ and now they're are just sitting there.  But don't take my word for it... I could be completely wrong.

...Dres (I'm sure that helps a lot... lol.)

[Trinity Yazimoto]

well so then.. why dont take they back their money and sell it on lindex ?

they havent lost anything... they havent sold their money to the TPE, but just put it there for some another resident buy it...So until sm1 have bought it to them, the money remain their property. So why dont they take it back and sell it on the 'allowed" market ?

yes, maybe they will have to wait a lil more time with lindex.. but this is not lethal from what i know... it just need another organisation and a lil time to get used... but well... 

[ImaTest1488314069]

 I understand why people have a problem with the policy, that isn't what I don't understand.

What I don't understand is, IF a halt was put into place, and it was as we all know. Why then was money NOT returned to it's rightful owner. Why on earth is it still hanging in limbo? There is NO reason for these exchanges to not simply send the money back to where it came from and be done with it. Yes I know there is a "no more trading in L" halt put out. But I fail to see how telling these companies, which in actuality are more individuals than actual companies but we'll not banter semantics....is stopping them from simply reversing what was already sent in. That's not trading lindens, it's not working as an exchange, nothing of the sort. I also can't see the lab having a problem with these companies sending the money back. I rarely support them on any decision they make, but even I can see they'd be beyond daft to say "no, you cannot return that money to it's own you must hold it foreverrrrrrrr". That makes no sense at all. It serves absolutely no one. Not the exchange, not the lab and certainly not the resident(s) in question. Now if it benefitted the lab, it might make more sense for them to say such a thing, because they do look after #1 and to them, that's them. But, in this case, it wouldn't serve them well, at all. I don't think the money amounts matter, well they don't matter as far as my search for understanding is concerned. The amounts themselves are irrelevant to the question of "is money really sitting in limbo, or not" and "if it is sitting in limbo... why the hell is it doing that". Money amounts don't matter in either question.

People are claiming these companies, these exchanges, are much faster than the lindex. I wouldn't know personally, I've only ever used the lindex to be honest. But if they are so much faster, money would not be hanging in limbo. It would have been sent in and traded out, within these "minutes and seconds" people are claiming. It would not be sitting, over 24 hours later, still in limbo.

Now, if people are really exaggerating those claims and these companies don't actually cash out that quickly, money sitting in limbo makes much more sense. But try asking someone who says their money is hanging in limbo, and I guarantee you'll get the same kind of head **bleep** to the side I have gotten. Or worse, they'll tell you to eff off as you must work for the lab. Yeah I don't get that one either. No one seems to know the answer, it seems. No one can seem to answer why, an exchange that works within minutes, has money sitting in limbo for over 24 hrs. Which leads me to one of two conclusions-and to be frank, tho my name's not frank, I don't think either of them are completely right either. Tho they may be partially right. It tells me either people are lying about how fast these exchanges swap out their money for whatever currency it is they choose. Or they are lying about having money in limbo at all because it makes the argument against this halt seem more credible.

Like I said, I don't believe either answer to be correct, but it's the only conclusion I can come up with if someone can't give me an actual answer. Hence, my search for understanding.

The argument against the halt is pretty credible without all the "woe is me my money is gone, it's never coming back" stuff I have read. I'm sorry to say that so harshly, but, without any sort of information to back up that type of claim, it just sounds poor. Ok, maybe I'm not sorry, I could have worded that much worse. I just do not understand all this money being in limbo mumbo jumbo. Not when the argument for these exchanges seems to be, well the main argument, that they work instantly, or at least on a far more efficient time frame than the lindex. I'm quite certain they do move on a faster time frame, which leads me more towards leaning in the direction of "no money is actually up in limbo right now, people are just pissed and this is what they're saying because they're so pissed". If these exchanges move swiftly and people only use them to swap out linden for cash(or their currency as it were) there is no reason for a hold time on any money amount, at least no hold time this significant. So, that would mean, no money has been lost, misplaced, left to live on it's own in the world with nothing but the ink on its back, or anything remotely like that. I'd rather know the actual answer than be left to my own devices and come up with conclusions that probably aren't accurate at all. My mind is a bit of a wanderer when left to his own self.

I talk too much, but hopefully this clarifies my concerns a bit more. If not, Ill try later.

[Dresden Ceriano]

I have to assume that TPEs can't give them back their unsold L$ because LL told them to stop operating in SL.  But, like I said, I don't really understand it myself... hopefully someone will come along who can put it in a way that will make it perfectly clear.

...Dres

[ImaTest1488314069]

---

Dresden Ceriano wrote:

I have to assume that TPEs can't give them back their unsold L$ because LL told them to stop operating in SL.  But, like I said, I don't really understand it myself... hopefully someone will come along who can put it in a way that will make it perfectly clear.

...Dres

---

I sure hope so. I really just can't see the lab having an issue with all lindens being returned to where they came from. If that is the case, I would love to see an explanation as to why. I do understand them telling the companies not to take any more exchanges. But not returning the ones that haven't yet gone through makes absolutely no sense.

It wouldn't be the first time the lab made I move I didn't understand, I'm far from a fanboy of them. I just really can't wrap my head around the idea thta the lab has told them all "no, keep other people's lindens". because that's what this amounts to. That's just plain stupid, really. And, if I am not mistaken, that would open the lab up for potential legal issues. As they'd be fascilitating the unlawful hold of property... or some such garbage using much better legalise. I'm sure there is a legal precedent for something of that nature. Something like that, would hold the lab 100% liable, and we all know they'd prefer to be 0% liable, for anything. So intentionally making themselves liable, doesn't seem in character, at all. Even if they were liable due to following US law, it wouldn't remove liability(and this particular law, as we know, does not, it actually adds liability, hence the entire problem).

Sigh. Maybe I should just let people answer. Hopefully someone who owns one of the exchanges can come along and answer, they'd probably have the best one. Or even someone who has money sitting in limbo, that has spoken with the exchange holding their money. They'd probably know too. All I can do is guess and my guesses will only get worse, I fear.

 

[Dresden Ceriano]

The thing about it is... wouldn't the TPEs have to purchase the L$ through the Lindex in order to return them to their customers?  That could be a whole lot of money.  It certainly is a mess.

...Dres

[Trinity Yazimoto]

They are not supposed to sell or buy anything, but only to make the transaction possible and taking a commission for this... 

 

[Drake1 Nightfire]

I have been trying to figure this out myself..

Lets say i run a third party exchange.. Don't i have to have an avatar somewhere in SL that holds all this money?

I don't think LL would have any issue with them returning L$ to the original owners. That would be foolish of the Lab as that money is not being exchanged. Personally i think these exchanges that are saying "sorry, we can't give it back to you cuz LL says we have to stop." are just doing that so they can exchange the L$ through the lindex for USD. Which is essentially stealing.

[Azanor]

---

ImaTest wrote:

 

Now, if people are really exaggerating those claims and these companies don't actually cash out that quickly, money sitting in limbo makes much more sense. But try asking someone who says their money is hanging in limbo, and I guarantee you'll get the same kind of head **bleep** to the side I have gotten. Or worse, they'll tell you to eff off as you must work for the lab. Yeah I don't get that one either. No one seems to know the answer, it seems. No one can seem to answer why, an exchange that works within minutes, has money sitting in limbo for over 24 hrs.

---

I'll try to answer your question. TPE's trading system is built for accepting deposits, matching the buy and sell orders and processing withdraw orders. If you are a TPE you probably are handling a high volume of transactions and these transactions are managed by an automated system. It was their in world terminals that were connected to the trading system they were running out world.

They are told to disable the terminal system and remove it immediately. Once they comply with it, and some of them claim they did, the only remaining way of returning customers money is doing it manually. Now when their activities are put on hold if they were carrying a thousand active orders, they need to examine all the transaction records and transfer  your L$ or money back manually. Even if they are do gooders, and willing to return every last cent of the customers money, sorting all these out and processing reimbursements one by one  is a very time consuming thing. 

So unless TPE's trading SL account is canceled the customers money shouldn't be lost, but it waits in the TPE's account pool, and it may take a while till people get their money back. What people are complaining about (in this matter) is LL could have given them advance notice for the removal of the terminals, and they could have stopped accepting new orders, only letting the remaining account balances to be withdrawn by the customers while the terminals were still active. 

Thats being said I don't know what would have happened if TPE's delayed removing the terminals till their customers got their money back. Did they just use LL's move as an excuse or did LL threaten them canceling  all their accounts if they didnt comply immediately is not clear. 

 Edit: Typo

[wizzelone]

to be fair i don`t gif a crap about who sells/buys what where.

it whas convinians for me to go to a third party bank to get my L$.

i have a paypall acount but no creditcard en LL demands from me to conect my paypall acount

to a creditcard acount so in other words they cutt of my way to get L$ that way.

i could buy L$ by my normal local bankacount at a thirdeparty money system so tell me LL how 

the hell am i gone buy L$ now smart moorons.

and i can tell you there are a load of people out there who have no creditcard but a paypall acount.

LL is going to lose a fragging load of money if they do not change that system by them to by L$,

 

just my 2 cents

[Trinity Yazimoto]

---

Azanor wrote:

So unless TPE's trading SL account is canceled the customers money shouldn't be lost, but it waits in the TPE's account pool, and it may take a while till people get their money back. What people are complaining about (in this matter) is LL could have given them advance notice for the removal of the terminals, and they could have stopped accepting new orders, only letting the remaining account balances were withdrawn by the customers while the terminals were still active. 

 

---

Everybody know that TPE are not the Official trader (Lindex) and because of this, they can be a bit more risky if smth like what is happening now  happens.

If pp choose an alternative system, they cant ignore this.... Or its intellectual laziness and it doesnt make an excuse...

For everything there are good and bad sides... the official system (lindex) is secure but slow.... the alternative ones are fast but less secure... 

when pp choose one or the other good side, they get the bad side that comes along. But ir remains their choice and only their.

[WolfBaginski Bearsfoot]

I have maybe escaped some of the problems because I set up my Paypal account a long time ago, used it for selling some stuff on eBay.. It's linked to my bank account. and so I transfer money to Paypal using my bank's internet banking service. And then Paypal to Linden Labs is easy. You can pay your Premium membership by this route, but Linden Labs insist on your credit card being set up for this as a default, and that's where things seem messy.

There's something odd about the way all this has happened. It won't be the first time that Linden Labs has seemed to ignore their own rules on changing the TOS. But why? Has there been some massive security breach? Or is it an ultimatum from the US government? Naybe there is a reason to not disclose the security problem, but I can't see why, if this is the effect of some new legal requirement, that must stay silent.

Is it incompetent comminication, or some massive fraud?

[Melita Magic]

Wolf, and I am only guessing, but in my opinion, the recent terrorist acts plus concern about Bitcoin and other virtual currency being used to launder money for or by unsavory folk, has led to 'err on the side of caution.' If I were an owner or in the legal dept. of LL I would probably tell them to do what they have done, or something like it.

I do think it could have been perhaps handled differently but then, the last time a big change happened in SL and LL tried to put Lindens in the froums to explain things, it only led to more confusion and a longer simmering hostility from residents. Maybe they learned then to just unleash and take cover.

 

[ImaTest1488314069]

Ok, I've read some replies, and talked with some people.

I get that these TPE may need to return money manually. That much, makes sense, at least more sense than anything else I've seen. Depending on the type of system they have, how it works and how they'd handle such issues.

My question then would be....why are they not doing it?

Over 24+ hours and not a single person has said "X TPE has returned my money that was sitting in their account, yay", or anything like that. In fact, as more time goes on, we're getting more and more people saying their money is in limbo.

Which again puts me at....why.  Or rather, why are people saying they are not doing this.

It's probably asking a lot, but I would really love to see one, or more, of the TPE owners actually come to the forums, or somewhere, to answer that type of question.

We may not all understand why the changes took place, and to be honest if I am 100% certain of anything, it is that. But they really could shed some more light on things. That's not to say they aren't busy, I'm sure they have their hands full too. But they certainly aren't coming out of any of this looking like victims, which they would be if this was an all of a sudden change no one ever suspected could ever possibly happen. If they indeed have customer money in their "hands" so to speak, and had absolutely no way to return it to it's rightful owner, I would venture a guess that someone would say so. But no one has. People have even spoke with the TPE owners, not one of them has said they can't.

I have spoken to someone, outside the forums, and since this is second hand knowledge I'll let you do with it what you will. But, one particular TPE owner did suspect a change like this was in the future, because his legal team told him so, a short while back. When asked to halt trading actions, he complied. Any money that had been placed in their system was rightly sent back to the customers it came from. For the short while that terminals were still inworld and people were trying to cah out like mad men, all monies were instantly refunded. So, I am guessing that other TPEs could very well do the same. They in fact, may have done the same. Which tells me the amount of money in limbo, if it exists at all, is likely minimal. I do believe this source is credible, but that's just my opinion of it. So I would take it with a grain of salt. I just have no reason to believe otherwise. I'm not a gullible man, but sometimes things are more reasonable than not.

Unless someone who owns a TPE or has money sitting in limbo wants to correct me on that, I'll continue believing that bit, was added for effect. It certainly was effective too, it got a whole lotta people hot under the collar, and there's not even a shred of proof it's true. At least everything else people have said, makes sense, and is true. This bit, however, does not. I know,it's probably a minor complaint most don't care about, given that the other complaints are all pretty important. But, for me, even minor things matter. I don't much care for people blowing things way out of proportion, or flat out lying, like that. What people are saying about money just sitting there, or worse, lost, makes not just the lab look bad but ALL the TPE owners look bad too. That's not cool, imo.

[Alicia Sautereau]

Giving back money is not exchanging as it is in l$ already so within the ToS

Terminals that only return money and not accept plus the 30 days notice nothing stops them from doing that

[Perrie Juran]

---

ImaTest wrote:

 

I have spoken to someone, outside the forums, and since this is second hand knowledge I'll let you do with it what you will. But, one particular TPE owner did suspect a change like this was in the future, because his legal team told him so, a short while back.

---

I made the point in another thread that any TPE operating with out Legal Counsel would be taking huge risks because they were handling money in the International Market.  If that Legal Counsel failed to warn the TPE of these impending problems/changes, then IMHO that Counsel has done a poor job.

But this brings up another point.  The TPE's would have had to be using the services of a Bank to handle the transfer of funds.  What would there be to stop or keep one of these TPE's from using a Bank that was not compliant with anti-laundering practices in their own local, such as The Vatican Bank which has failed to comply with EU regulations?

 

[Ciaran Laval]

I think that maybe once the money is in the TPE, it's gone from the world and becomes the TPE currency. I don't have enough in the TPE I use to test this, but it would be worth asking someone who does, whether they can still buy money with their account balance.

[Perrie Juran]

---

Ciaran Laval wrote:

I think that maybe

once the money

is in the TPE, it's gone from the world and becomes the TPE currency. I don't have enough in the TPE I use to test this, but it would be worth asking someone who does, whether they can still buy money with their account balance.

---

"once the money"   

If by this you are referring to Linden Dollars, there is actually no way to withdraw them from SL.

They can't go to LL and say "I want to withdraw a hundred Lindens from my account."

[Ciaran Laval]

No sorry Perrie, I mean once it has been paid to their exchange, they exchange for something else other than Linden Dollars. I'm speculating but I would imagine that if everyone had decided to withdraw their funds from a Third Party Exchange back to SL, they wouldn't be able to fund it.

The same would happen if everyone decided they wanted to empty their RL bank accounts.

[Madeliefste Oh]

A TPE is just another resident doing business in SL. Some of the large ones might be a business in rl as well and hire personel to handle customer service and support in SL. From one day to the other their source of income has dried up, so I can imagen that it's not easy at all for them to handle with this situation. Questions like: 'how to fire my personel?', or 'how to get income te be able to pay my bills next month?' might be of greater importance now then 'how to return the money to individual residents that is pending in het system?'.

I will depend on individual ethics of each exchange owner (and their need for money now their source of income had dried) if people are going to see their pending money back or not.

If not, I'm afraid there is not much you can do. LL will handle it as a resident to resident dispute, and won't step into it.

If you have the bad luck that your exchagne owner doesn't care a bit for paying back the funds, the only way that is left for you to see your money back is get after his rl name and file a lawsuit. In most cases this trouble won't be worth the amount of money that is lost.

[Perrie Juran]

---

Ciaran Laval wrote:

No sorry Perrie, I mean once it has been paid to their exchange, they exchange for something else other than Linden Dollars. I'm speculating but I would imagine that if everyone had decided to withdraw their funds from a Third Party Exchange back to SL, they wouldn't be able to fund it.

 

The same would happen if everyone decided they wanted to empty their RL bank accounts.

---

I had considerred this issue also. 

RL Banks in the U.S. are required by law to keep a certain percentage of their deposits in cash on hand.  The rest is just book keeping entries because 90% (a random number, I don't know the actual number) of their deposits are out on loan.

But yes, I had considerred the possibilty that a TPE may not have enough cash on hand to refund all their customers.  I sure hope that is not the case and I am sure not going to accuse any of the TPE's of this without solid evidence.

[Innula Zenovka]

---

Ciaran Laval wrote:

I think that maybe once the money is in the TPE, it's gone from the world and becomes the TPE currency. I don't have enough in the TPE I use to test this, but it would be worth asking someone who does, whether they can still buy money with their account balance.

---

I don't know about the other exchanges, but certainly yesterday (Thursday) you could still use existing L$ deposits with Virwox to buy US$ -- my business partner and I pooled our funds and she cashed them out out to her USD paypal account.

You couldn't deposit L$ with them, nor send your L$ held on account there back in-world, but you could sell them or send them to other Virwox customers.