New Second Life terms and conditions

[Arielle Popstar]

37 minutes ago, Love Zhaoying said:

There's a new ToS? Do you care about it?

Yes, that new thing you agreed to in the last day or two. And yes I care about it  for at least the same reasons as you did initially:

On 10/25/2022 at 2:12 PM, Love Zhaoying said:

But..it means any hope I had of a "giant project" one day yielding "profit" means, at the most I could hope to finance my Second Life.  

That is aside from the progressive restrictiveness updated ToS's have brought in over the years. They have never benefitted the residents.

[Ceka Cianci]

11 minutes ago, Love Zhaoying said:

What are you referring to when you use this term? 

I assumed you meant "Tillia", then I assumed you meant "L$ balance that can be used for payments".

It is not a term that I am familiar with.

That is where your usd value sits, pretty much your wallet.. You can't make payments with your linden dollars, only from your wallet that has real usd value..

 

ETA: From what I gather it goes like this.. you put lindens on the lindx, those get sold to another user, that amount goes into your stored value account and then you can transfer those to your bank..

That or you can determine how much of a transaction goes into your wallet and how much goes to your bank.. I'm not sure on that part really since i don't cash out myself.. hehehe

Edited November 2, 2022 by Ceka Cianci

[Rowan Amore]

So...those opposed that also keep reiterating the same info.  What's your option/recommendation?   Storm the LL castle?  

 

 

[animats]

Oh, here's something interesting. If you're into finance stuff. Read this opinion from the California Department of Financial Protection and Innovation. It begins:

"The Company allows customers to deposit fiat currency to a Company account and then draw down that balance to purchase virtual currency from the Company. The purchased virtual currency is transferred to the customer’s virtual currency wallet issued by the Company, and can then be held there, transferred to an external wallet, or sold for fiat currency. The Company then purchases a corresponding amount of virtual currency from a third party."

The company involved has been blanked out, but it's probably Tilia, because it specifies a different company issuing the virtual currency and handing fiat. That's rare. I don't know of any game company that has a two-company setup like LL/Tilia.

This clarifies how Linden Dollars really work through Tilia. There's an arms-length relationship between Tilia and Linden Lab. Tilia buys Linden Dollars from Linden Lab for real money and then stores them for Tilia customers. That could be done differently. The alternative would be Tilia being a contract custodian for assets owned by Linden Lab. Like Depository Trust Company, which holds stock for brokerages but does not own it. But that approach creates cross-liabilities. The approach they took doesn't.

Tilia now has a reasonable setup. It gives Tilia a reasonable balance sheet, a necessity for an acquisition. Tilia holds assets it owes to users, and those net out to zero. (That is, amount on deposit equals amount owed to user.) Tilia is not, absent other deals not listed, either a creditor or debtor of Linden Lab. Tilia does not have exchange rate exposure to Linden Dollars. Thus, Tilia can be valued as an separate business without financial exposure to risks from whatever LL does in future. All this made Tilia acquisition-ready.

More from the DFPI:

"The customer’s fiat currency balance in the Company account does not meet the definition of stored value. The funds in that account can only be used for virtual currency purchases from the Company or transferred out to the customer’s external bank account. As such, this stored value is closed loop does not constitute issuance of stored value that is regulated under the MTA."

Ah. Now we have the explanation of paragraph 4.1 in the Tilia terms of service. which is in boldface in the original:

"The use of each Stored Value Balance is limited to the Platform in connection with which it is issued, meaning that it may not be used to make payments to any other Publisher, or through any other Platform, with which the Tilia Service is integrated."

So that explains the strange restrictions on fiat balances with Tilia. You'd expect they'd just be like bank balances. The bank doesn't care what you spend money on. Why does Tilia? That's why.

The Department of Financial Protection and Innovation goes on:

"Based on these facts, the Department is not requiring the Company to be licensed under the
MTA at this time. Please be aware, however, these conclusions are subject to change. At any
time, the Department may determine these activities are subject to regulatory supervision. The
Department may also adopt regulations or issue interpretive opinions that significantly restrict
these business operations. If the Company chooses to operate in California, it would do so
subject to these risks."

So, DFPI is saying that Tilia is close to the line, but not over it, and in future DFPI might decide it's over the line.

Interesting.

Now, if in future, J.P. Morgan Payments / Chase acquires the remainder of Tilia, and it becomes part of the Chase banking and brokerage empire, then this restriction will probably be removed, because banks are already regulated by banking regulators and don't need a money transmitter license. That's what happened when J.P. Morgan Payments bought 100% of WePay. The WePay terms became much more bank-like, and it became easier to move money around. That would be a good end state for Tilia.

Nice financial engineering.

This doesn't really affect SL users. It does explain some of the strange contract terms, which are less of a concern to users now that the underlying rationale is clear.

Edited November 2, 2022 by animats

[Love Zhaoying]

7 minutes ago, animats said:

Tilia buys Linden Dollars from Tilia for real money and then stores them for Tilia customers.

Hi Animats, maybe the bold part of this is a typo? 

[animats]

2 minutes ago, Love Zhaoying said:

Hi Animats, maybe the bold part of this is a typo? 

Oops, fixed. Good to know someone reads all this detail.

[Love Zhaoying]

2 minutes ago, animats said:

Oops, fixed. Good to know someone reads all this detail.

I stopped there, sorry! Will go back and try again!

[Ceka Cianci]

1 hour ago, animats said:

Oh, here's something interesting. If you're into finance stuff. Read this opinion from the California Department of Financial Protection and Innovation. It begins:

"The Company allows customers to deposit fiat currency to a Company account and then draw down that balance to purchase virtual currency from the Company. The purchased virtual currency is transferred to the customer’s virtual currency wallet issued by the Company, and can then be held there, transferred to an external wallet, or sold for fiat currency. The Company then purchases a corresponding amount of virtual currency from a third party."

The company involved has been blanked out, but it's probably Tilia, because it specifies a different company issuing the virtual currency and handing fiat. That's rare. I don't know of any game company that has a two-company setup like LL/Tilia.

This clarifies how Linden Dollars really work through Tilia. There's an arms-length relationship between Tilia and Linden Lab. Tilia buys Linden Dollars from Linden Lab for real money and then stores them for Tilia customers. That could be done differently. The alternative would be Tilia being a contract custodian for assets owned by Linden Lab. Like Depository Trust Company, which holds stock for brokerages but does not own it. But that approach creates cross-liabilities. The approach they took doesn't.

Tilia now has a reasonable setup. It gives Tilia a reasonable balance sheet, a necessity for an acquisition. Tilia holds assets it owes to users, and those net out to zero. (That is, amount on deposit equals amount owed to user.) Tilia is not, absent other deals not listed, either a creditor or debtor of Linden Lab. Tilia does not have exchange rate exposure to Linden Dollars. Thus, Tilia can be valued as an separate business without financial exposure to risks from whatever LL does in future. All this made Tilia acquisition-ready.

More from the DFPI:

"The customer’s fiat currency balance in the Company account does not meet the definition of stored value. The funds in that account can only be used for virtual currency purchases from the Company or transferred out to the customer’s external bank account. As such, this stored value is closed loop does not constitute issuance of stored value that is regulated under the MTA."

Ah. Now we have the explanation of paragraph 4.1 in the Tilia terms of service. which is in boldface in the original:

"The use of each Stored Value Balance is limited to the Platform in connection with which it is issued, meaning that it may not be used to make payments to any other Publisher, or through any other Platform, with which the Tilia Service is integrated."

So that explains the strange restrictions on fiat balances with Tilia. You'd expect they'd just be like bank balances. The bank doesn't care what you spend money on. Why does Tilia? That's why.

The Department of Financial Protection and Innovation goes on:

"Based on these facts, the Department is not requiring the Company to be licensed under the
MTA at this time. Please be aware, however, these conclusions are subject to change. At any
time, the Department may determine these activities are subject to regulatory supervision. The
Department may also adopt regulations or issue interpretive opinions that significantly restrict
these business operations. If the Company chooses to operate in California, it would do so
subject to these risks."

So, DFPI is saying that Tilia is close to the line, but not over it, and in future DFPI might decide it's over the line.

Interesting.

Now, if in future, J.P. Morgan Payments / Chase acquires the remainder of Tilia, and it becomes part of the Chase banking and brokerage empire, then this restriction will probably be removed, because banks are already regulated by banking regulators and don't need a money transmitter license. That's what happened when J.P. Morgan Payments bought 100% of WePay. The WePay terms became much more bank-like, and it became easier to move money around. That would be a good end state for Tilia.

Nice financial engineering.

This doesn't really affect SL users. It does explain some of the strange contract terms, which are less of a concern to users now that the underlying rationale is clear.

As far as tilla buying linden dollars from LL.. I was under the impression that a user puts up their linden dollars on the exchange, where they sell their linden dollars to another user or users for the market price at the time. That user or users buy the linden dollars with with real world currency, then that currency or value is what is worked with.. So they wouldn't be buying linden dollars from linden lab. Linden Lab would be depositing the currency or value equivalent to the U.S. dollar from the trade..

So in short, it would be user and user make the actual trade of lindens and USD, which they get taxed on.  Then Tilla and linden lab  and the seller deal with the handling of the money after the trade is complete.

I think it's important to keep linden dollars where they start and where they stop in the transaction and where the usd or value of usd begins.

The only reason I say any of this is because, I know it was important for linden lab to remain more the middle man and trades be between users..

 

 

[Arielle Popstar]

Tilia in this way is acting as either a broker or dealer. Brokering deals between residents or selling directly to Residents when they choose Instant Buy.

 

[Ceka Cianci]

23 minutes ago, Arielle Popstar said:

Tilia in this way is acting as either a broker or dealer. Brokering deals between residents or selling directly to Residents when they choose Instant Buy.

 

This is from Tilla's website as an example of their service.. picture it as you are LL reading about their service and also picture a widget as a linden dollar..

The difference is our trades happen on the exchange rather than in world.

Example Use Case

Alice wants to buy a digital product from Bob, another user in your platform. Both of them have Tilia accounts that they use for in-app transactions.

As a seller, Bob has completed our Know Your Customer (KYC) process and is eligible to receive funds.

Alice purchases the digital widget from Bob. The funds transfer to Bob's wallet, and you receive a fee for processing the sale.

Bob can now use wallet funds to purchase in-app goods, or they can request a payout.

 

Edited November 2, 2022 by Ceka Cianci

[Love Zhaoying]

4 minutes ago, Ceka Cianci said:

they can request a payout.

Good luck, at least they can "request" one!

[Ceka Cianci]

10 minutes ago, Love Zhaoying said:

Good luck, at least they can "request" one!

That's just an over all basic example for any virtual worlds or meta verses.. From what I'm reading there, it depends on your platform and how you want them to handle things..

With ours I think you can either cash out or put them in your wallet or split them.. Again I'm not sure because I don't cash out, but the times I did, I don't remember anything sitting in a wallet waiting for another request. We might not have even had wallets the last time I cashed out.. hehehehe

 

My point was, I think they are the money handlers and on the other side of a trade it goes into tillas hands and handled with how LL already has them set up.. Then LL gets the fee's for the transaction..

Edited November 2, 2022 by Ceka Cianci

[Arielle Popstar]

51 minutes ago, Ceka Cianci said:

My point was, I think they are the money handlers and on the other side of a trade it goes into tillas hands and handled with how LL already has them set up.. Then LL gets the fee's for the transaction..

The part where I have a problem is that the Money Transmitter function is that of a  broker who can transmit funds electronically and from what I know of brokerage regulations, the idea of having to request/beg for a payout from the monies held by them for the resident, would not be based on their discretion. That is not just badly worded but changes the function of a broker to a degree where it could be very easily abused.

[Ceka Cianci]

37 minutes ago, Arielle Popstar said:

The part where I have a problem is that the Money Transmitter function is that of a  broker who can transmit funds electronically and from what I know of brokerage regulations, the idea of having to request/beg for a payout from the monies held by them for the resident, would not be based on their discretion. That is not just badly worded but changes the function of a broker to a degree where it could be very easily abused.

My main concern from the get go was, when can the IRS get involved.. That pretty much happens at the exchange..

I just wanted to know where they see actual income.. A lot of this other stuff, I have a lot of curiosity about also..

Like for instance, If we are buying lindens from the viewer are we still just buying from users waiting on the exchange to sell their lindens.. I would think so, rather than there just being huge amounts of new lindens getting put into the economy.. Because on the buy end of the exchange that's where those go as well, right back into SL.

From what I gather, Tilla is the guard dog  over the money transfers and making sure they are keeping things legal and up to date with legal changes and laws changes.. LL sets up their reasons to hold any money or if something is good to go..

Tilla has their reasons to hold as well, like if they think something strange is going on like laundering or whatever..

They seem more like a payment service than a broker.. From what I understand of what a broker is anyways.. hehehe

ETA: Honestly, I think a lot of this has to do with keeping the linden dollar from becoming a bitcoin or crypto or a currency like that..

Imagine if that ever happened and how quickly a lot of us would get out of here.. I've done someones taxes that played with bitcoins and cryptos.. That's not a headache that is fun to have at tax time.. You have to account for every up and down, buy and sell and trade and purchase of just every day stuff.. it's pages and pages of  like looking at the amount of text you would see in the page of the bible and then having to do all that math.. it's pure  biotch and a half x11ty.. hehehehe

Edited November 3, 2022 by Ceka Cianci

[CaithLynnSayes]

[Gabriele Graves]

Strangely enough, we had this a few days ago:

https://www.theguardian.com/world/2022/nov/01/new-zealand-authorities-apologise-for-encouraging-parents-to-tax-halloween-sweets

 

[Ceka Cianci]

50 minutes ago, CaithLynnSayes said:

Gotta step on it first and wait till nobody is lookin, then put it in a shelter till you 65. 😝

[Gabriele Graves]

7 minutes ago, Ceka Cianci said:

Gotta step on it first and wait till nobody is lookin, then put it in a shelter till you 65. 😝

Preferably go back in time a hundred years and put in a high earning savings account.