Latest update from virwox about L$ excahnges

[Kahlie Niven]

2013-05-17: VirWoX is now Authorized Linden Dollar Reseller
 

We are proud to announce that VirWoX has been awarded the status are of an officially Authorized Linden Dollar Reseller by Linden Lab.

As a result, we can continue to offer the residents of Second Life a wide range of payment options to buy Linden Dollars with.

However, please note that under the new terms of service we are no longer allowed to take back your Linden Dollars from Second Life and let you "cash out". Our in-world terminals will therefore no longer accept Linden Dollar deposits.

The VirWoX Partner Network and the Currency Shop Program will continue as before. About 5.5 million Linden Dollars have already been paid to our partners in the first 4 months of 2013.

 

 

In other words, third-party exchangers are now only allowed to buy L$...cashing-out is now totally forbidden.

 

[chrismignon McDonnell]

http://wiki.secondlife.com/wiki/Linden_Lab_Official:Linden_Dollar_(L$)_Authorized_Reseller_Program

The list of Authorized Reseller

[Gordon Wendt]

I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them).  In the meantime, since the only way for Virwox et al. to get Lindens is from LL, they're only going to be worthwhile to people who for whatever reason can't use the Lindex and they're going to be a penalty for that privilege in the form of higher fees and a worse rate of exchange.

[Kahlie Niven]

---

Gordon Wendt wrote:

I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them).  In the meantime, since the only way for Virwox et al. to get Lindens is from LL, they're only going to be worthwhile to people who for whatever reason can't use the Lindex and they're going to be a penalty for that privilege in the form of higher fees and a worse rate of exchange.

---

Yup, not interesting at all unless you can't buy L$ from Lindex.

And for merchants who need to cash out their income, well, they're just F*** up. Thanks to the LL who made me lose 900 usd because of the added delay (have now to pay interests from my fresh new overdraft on bank account).

[Jadeclaw Denfu]

Gordon Wendt wrote: "I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them)."
Won't happen. Reason: The Landbarons. The land rental business is only possible in this form, because the landlords can
accept L$ and convert them back into US$ and pay tier with that. Preventing the conversion/pay out via the LindeX
would kill it. Imagine the big landbarons start dropping Estates/Regions - That's similar to a grade 7 earthquake on Battery Street.

Btw. Eldexchange has applied as an authorized reseller as well, when they get the permission, I will stay with them,
as they served me well in the past. And good service should be honored.

 

[Dillon Levenque]

---

Jadeclaw Denfu wrote:

Gordon Wendt wrote: "I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them)."

Won't happen. Reason: The Landbarons. The land rental business is only possible in this form, because the landlords can

accept L$ and convert them back into US$ and pay tier with that. Preventing the conversion/pay out via the LindeX

would kill it. Imagine the big landbarons start dropping Estates/Regions -

That's similar to a grade 7

earthquake

on Battery Street.

Btw. Eldexchange has applied as an authorized reseller as well, when they get the permission, I will stay with them,

as they served me well in the past. And good service should be honored.

 

---

 

Um, we try not to use that word any more than neccessary around here. I'm about as far west of the San Andreas Fault as Battery Street is east of it, somewhat less than 100 miles south of LL (and it's more active in my neighborhood than theirs).

 

ETR the damned apostrophe. Again.

[Amethyst Jetaime]

---

Kahlie Niven wrote:

---

Gordon Wendt wrote:

I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them).  In the meantime, since the only way for Virwox et al. to get Lindens is from LL, they're only going to be worthwhile to people who for whatever reason can't use the Lindex and they're going to be a penalty for that privilege in the form of higher fees and a worse rate of exchange.

---

Yup, not interesting at all unless you can't buy L$ from Lindex.

And for merchants who need to cash out their income, well, they're just F*** up. Thanks to the LL who made me lose 900 usd because of the added delay (have now to pay interests from my fresh new overdraft on bank account).

---

LL is not responsible for your overdraft fees and interest charges.  You shouldn't have written a check for money you didn't have yet.

[Alicia Sautereau]

---

Amethyst Jetaime wrote:

---

Kahlie Niven wrote:

---

Gordon Wendt wrote:

I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them).  In the meantime, since the only way for Virwox et al. to get Lindens is from LL, they're only going to be worthwhile to people who for whatever reason can't use the Lindex and they're going to be a penalty for that privilege in the form of higher fees and a worse rate of exchange.

---

Yup, not interesting at all unless you can't buy L$ from Lindex.

And for merchants who need to cash out their income, well, they're just F*** up. Thanks to the LL who made me lose 900 usd because of the added delay (have now to pay interests from my fresh new overdraft on bank account).

---

LL is not responsible for your overdraft fees and interest charges.  You shouldn't have written a check for money you didn't have yet.

---

or rely on a game

Yes, game, even if i take it as seriously as my rl job, it remains a game virtual pixels with linden tokens

[Innula Zenovka]

---

Gordon Wendt wrote:

I truly believe that it is only a matter of time until LL stops L$ to USD sales on the Lindex and makes it so that people can only buy L$ (from them).  In the meantime, since the only way for Virwox et al. to get Lindens is from LL, they're only going to be worthwhile to people who for whatever reason can't use the Lindex and they're going to be a penalty for that privilege in the form of higher fees and a worse rate of exchange.

---

So I would have thought too, until my attention was drawn to the rates the TPEs are actually offering.

If I buy L$10,000 as a market buy on the Lindex at the moment, it will cost me about $40.79 US.    If I buy it from VirWox at their current Bid price of 254.0, that works out at $39.70.

I can't explain it either, but there you have it.

 

[Kahlie Niven]

---

Amethyst Jetaime wrote:

LL is not responsible for your overdraft fees and interest charges.  You shouldn't have written a check for money you didn't have yet.

---

Indirectly, yes, LL is responsible for it.

Delay to cash out incomes jumped from a single day to more than 10 days, while I was working with enough liquidity to cover a week of liabilities. when the change in TOS happened, without any warning, I had to sundenly face 10 days of liabilities, with liquidity for 7 days...The 3 missing days represent the overdraft.

 

LL didn't even respect it's own TOS, as they were supposed to let a month to everyone to comply with new rules, as written on the TOS (which would have allowed people to adapt, to increase account liquidity and so on).

And btw, no, I didn't write down any check yet...overdraft was caused by automatic monthly payments (including those required for my SL business : 12 dedicated servers over the world).

[Madeliefste Oh]

If you scroll down on that page, you have the possibility to order cheaper L$. You won't get your money immediately because you have to wait for your turn when you offer a buy order... but you get a better price.

 

 

[Gordon Wendt]

---

Jadeclaw Denfu wrote:

Won't happen. Reason: The Landbarons. The land rental business is only possible in this form, because the landlords can

accept L$ and convert them back into US$ and pay tier with that. Preventing the conversion/pay out via the LindeX

would kill it. Imagine the big landbarons start dropping Estates/Regions - That's similar to a grade 7 earthquake on Battery Street.

Btw. Eldexchange has applied as an authorized reseller as well, when they get the permission, I will stay with them,

as they served me well in the past. And good service should be honored.

 

They haven't been afraid to go after the land barons in the past. LL's past move to weaken and drive out many sim owners and landbarons over the last couple of years along with their moves to get people into Linden created and run estates could very easily translate into eventually making it so people have to buy land from LL, at least if they're buying large amounts of it. They'd have to do it slowly of course but isn't that what they've already been doing to a certain extent?

---

<

 

[Gordon Wendt]

Innula, the people on the thread you linked to bring up a good point though, unless they are getting a major discount that isn't sustainable. I'd expect that to change at some point because there's no way that they are buying from Lindex (which ostensibly they have to) and charging less than cost. The alternative explanation is that the TPE TOS is a fiction and they're getting some discount window type of deal directly from LL for Lindens and are actually paying less for them than we know.

[Abigail Merlin]

---

Gordon Wendt wrote:

Innula, the people on the thread you linked to bring up a good point though, unless they are getting a major discount that isn't sustainable. I'd expect that to change at some point because there's no way that they are buying from Lindex (which ostensibly they have to) and charging less than cost. The alternative explanation is that the TPE TOS is a fiction and they're getting some discount window type of deal directly from LL for Lindens and are actually paying less for them than we know.

---

They are getting a discount, the same one you and me can get buy placing limit orders and waiting a few days, it just means they have to plan ahead and keep a buffer so they can afford to wait for the limit orders to be filled.and with the same fixed fee of 0.30 usd it gets even cheaper to buy in large volumes.

 

that is also why you make relavily more profit trading on lindex when you have a large volume then when you only have a small volume, if I remember right you actualy need at least 200 usd trading volume to break even trading on lindex.

offcourse most people have no idea how lindex works so I can understand the confusion.

[Xavi Farstrider]

i used to buy and sell lindens on virwox before, so im a little disapointed that i can no longer quickly cash out but its better than nothing, id still prefer it if lindex offered european options however

[Lindal Kidd]

---

Kahlie Niven wrote:

...And btw, no, I didn't write down any check yet...overdraft was caused by automatic monthly payments (including those required for my SL business : 12 dedicated servers over the world).

---

What, you don't keep a three month tier reserve in your account?  That's basic good business practice.  Yes, you ARE responsible for everything and anything that happens to you in SL...haven't you read the TOS lately?

Actually, all of us are responsible for what happens to us, in both SL and RL.  It's just harder to ignore it in SL.

[Eddy Bouvier]

R.I.P. Virwox and all the others

If they have to buy their L$ on the Lindex, they're forced to resell them at a higher price (if they still want to make a profit). This will also kill the exchange market at all the 3rd party exchanges, as no money is allowed to flow out:

Up until now, the exchange market itself was the "money basket" where all the lindens went in and came out - i assume fairly evenly, and linden dollars are effectively only traded from one resident to another (minus a small fee for the exchanger). So the dynamics of the market, aka. supply & demand, will set the prices.
As of now, Virwox (and other exchanges) seize to be just that: and exchange market. They become banks, buying money in bulk from a central bank (aka. Linden Lab) and just supplying it to its customers. They can never offer their L$ at a lower price than Linden Lab does, bacause they'd make a loss if they did.

Add to that, that mostly these exchanges were used for cash-outs by non-US merchants and since cash-outs are stricly forbidden by this agreement they had to sign, so are those non-US merchants (like myself) doomed...

We, the people, have got to come up with a way to fix this, since clearly Linden Lab doesn't want to. Otherwise most non-US. merchants can close up shop. If anyone has an idea, let's not waste time and set it up asap.

[Innula Zenovka]

---

Lindal Kidd wrote:

What, you don't keep a three month tier reserve in your account?  That's basic good business practice.  Yes, you ARE responsible for everything and anything that happens to you in SL...haven't you read the TOS lately?

Actually, all of us are responsible for what happens to us, in both SL and RL.  It's just harder to ignore it in SL.

---

 I think the practicality -- possibly the wisdom too -- of keeping a three month tier reserve in your account rather depends on how much land you have.    Obviously it's a good idea if you can afford it but once you start thinking in terms of sims, not all of can afford to tie up $900 US a sim as reserves.

[Innula Zenovka]

---

Eddy Bouvier wrote:

R.I.P. Virwox and all the others

If they have to buy their L$ on the Lindex, they're forced to resell them at a higher price (if they still want to make a profit). 

---

I thought that, until I checked the rates Virwox and the others are offering.   We were talking about this earier in the thread, in fact.   Rather to my surprise, it's considerably cheaper to buy your L$ from VirWox than from LL, at least if you want them immediately.

[Kahlie Niven]

---

Xavi Farstrider wrote:

i used to buy and sell lindens on virwox before, so im a little disapointed that i can no longer quickly cash out but its better than nothing, id still prefer it if lindex offered european options however

---

Agreed.

There are a bunch of Paypal competitors all over the world, and all provide the required API to implement them to any online game (as of an Example : Neteller, Skrill, etc)

As said on their blog :

"We know that users are also concerned about the length of the LindeX’s cashout process and the limited choice of currencies when selling L$. We’re currently investigating ways to improve that experience for users while still providing superior fraud protections, and hope to hasten the cashout process and offer new currency options in the future."

LL has promised some alternative ways to cash out L$ since 2005, and is yet again promising.

 

[Dillon Levenque]

---

Eddy Bouvier wrote:

R.I.P. Virwox and all the others

If they have to buy their L$ on the Lindex, they're forced to resell them at a higher price (if they still want to make a profit). This will also kill the exchange market at all the 3rd party exchanges, as no money is allowed to flow out:

Up until now, the exchange market itself was the "money basket" where all the lindens went in and came out - i assume fairly evenly, and linden dollars are effectively only traded from one resident to another (minus a small fee for the exchanger). So the dynamics of the market, aka. supply & demand, will set the prices.

As of now, Virwox (and other exchanges) seize to be just that: and exchange market. They become banks, buying money in bulk from a central bank (aka. Linden Lab) and just supplying it to its customers. They can never offer their L$ at a lower price than Linden Lab does, bacause they'd make a loss if they did.

Add to that, that mostly these exchanges were used for cash-outs by non-US merchants and since cash-outs are stricly forbidden by this agreement they had to sign, so are those non-US merchants (like myself) doomed...

We, the people, have got to come up with a way to fix this, since clearly Linden Lab doesn't want to. Otherwise most non-US. merchants can close up shop. If anyone has an idea, let's not waste time and set it up asap.

---

 

LL has made many mistakes (or at least things that I personally consider mistakes). The lack of advertising prior to this last change of the TOS surely has to stand as one of their most flagrant mistakes. But people really need to read.

RIP Virwox? Had you looked? Your statement that they would be forced to resell Lindens at a higher price [than Lindex] if they still want to make a profit does not make sense. It implies they will have to sell Lindens at a lower rate than the LIndex (which in fact they do, as has been pointed out already—they buy in advance via the limit buy process) and thus take a loss. Why would they do that? What would be the point? Why would anyone engage in a business practice that guarantees they'll lose a bit on every transaction? Since Virwox is still manifestly in business and in the business of selling Lindens, one would have to think they're doing so profitably.

[Kahlie Niven]

---

Lindal Kidd wrote:

...haven't you read the TOS lately?

Actually, all of us are responsible for what happens to us, in both SL and RL.  It's just harder to ignore it in SL.

---

I already did, thanks. We may have no rights as resident, overall, though, we still ha a right : the 30 days delay.

 

Quoting :

 

1. CHANGES TO THIS AGREEMENT

This Agreement may be changed by Linden Lab effective immediately by notifying you as provided in Section 13.4 below; provided that Material Changes will become effective thirty (30) days after such notification. By continuing to access or use Second Life after the effective date of any such change, you agree to be bound by the modified Terms of Service. A "Material Change" is a change to this Agreement which reduces your contractual rights or increases your responsibilities under this Agreement in a significant manner.

 

[Kahlie Niven]

---

Innula Zenovka wrote:

 I think the practicality -- possibly the wisdom too -- of keeping a three month tier reserve in your account rather depends on how much land you have.    Obviously it's a good idea if you can afford it but once you start thinking in terms of sims, not all of can afford to tie up $900 US a sim as reserves.

---

I more believe she meant 3 months of accounting liquidity reserve, otherwise it's nonsense as my business has nothing to do with lands nor estates.

Though, to have 3 months of liquidity, it has to be built up (and to be honest, I did, though, mostly through short and mid term credit authorization, which costs interests).

But the point is: LL has generated a small liquidity crisis in SL...and they urgently rushed to solve half of it...because they didn't respect the 1st rule of their TOS (and they could be sued for it).

[Eddy Bouvier]

Somehow, it seems you're missing the point... You are right: they'll make a loss if they continue as they have  - that's what i was trying to explain.

 

If anyone, in the virtual world or in the real world for that matters, buys a product (in this case L$) and resells that same product at a lower price to attract customers, they'll make a loss. Clearly.
It doesn't really matter when you buy that product, if the price at the wholesaler (aka LL) stays the same over time.

If you, as a simple resident, place a limit order on the Lindex, you'll have to make it 256 L$/USD in order for it to be filled quickly (or 257 if you don't mind waiting a few weeks, since i'm sure you'll be put at the end of their L$93 million cue).

Now, as it states in their TPE agreement, any TPE can buy L$ on the Lindex, at the same price. Since, as you pointed out, a TPE can wait a few weeks if they purchase their L$ on the Lindex (buy upfront), they can get them at 257 L$/USD and unless they will sell those back to residents at a price higher than 257 L$/USD they'll undoubtedly make a loss.
Disadvantage of having to "buy upfront" is that you need a lot of money to begin with.

 

A company like Virwox does not sell Linden Dollars, at least not until the TOS changed. They merely acted as a portal where users can exchange L$ for other currencies with each other through the means of a liquid market, governed by supply and demand and of course the international exchange rates between the USD and the other foreighn currencies accepted. So if you buy L$ from Virwox, you don't actually buy them from the company, Virwox is just the middle-person that allows the L$ to pass from another resident to you, while passing your US dollars (or euros or pounds or whatnot) from you to the other user. The price at which you buy those Linden dollars, is NOT set by Virwox, but set by the resident you buy them from, just as it's done on the Lindex. Virwox profits from the fees they charge on each exchange between customers.
As per the new TOS, the limit-market is slowly dieing; the GBP market is all but done alrerady.

 

Another example are companies like DX-exchange. Since they are not working with a limit market, they are collecting L$ from people who want to cash out, and then later sell them back to people who want to buy Linden dollars. Their profit is in the difference between buy and sell prices.
Since they now have to buy those Linden dollars at the same price you can buy them on the Lindex, there isn't much hope for them either. The only thing they got going for them now, is that they can offer a wider range of accepted paymentmethods and currencies. But their prices are going to rise, if they want to keep making the same profit as they did.

 

Chances are very few will survive, which is bad for those companies, meaning dozens of people will loose their jobs. And it's bad for non-US residents, as pointed out so many times on the forums, since they're now forced to use theLindex for cash-outs or quit, if they can't. I've already heard people having to close up shops... sad really.

 

If anything, this new TOS will only encourage people to trade off the market, person-to-person: "You want to buy L$? hey, i want to sell some - let's do business". Perfectly legal within the TOS, since neither resident is a TPE.

[namssab1nad Piers]

Lets look at the 1 upside of this.  I am sure LL has been tracking where most copybotters (and spammers and phishers) originate from.  And it has been mentioned a few times in past posts that most seem to originate from Asian and Eurosian areas of the globe.  This change just put a big dent in those peoples ability to cash out their ill gotten Lindens.  Maybe enough to make them quit SL altogether.  Those that can partner up with someone in countries that can use Lindex will be easy to trace.  Just follow the money and it will lead you to their partners.  So maybe it might hurt in the beginning, but the net end result may be a better SL altogether.  And for those innocents who are hurt by this.  I feel for you.  But stay in touch in the forums.  Once these culprits are tracked (and it will happen pretty quick I am sure) and arrested by their local authorities, a somewhat normal cash out process will return in some way.