ToS L$ Change Update

There is still a huge amount of speculation going on in regard to the ToS change and the Lab’s issuing Cease and Desist emails to those operating L$ exchanges and building viewers that link to third party exchanges.

Linden Dollar Exchange PODEX

Linden Dollar Exchange PODEX

In one thread over on SLUniverse the participants are trying to figure out why third party exchanges are suddenly illegal. They aren’t illegal. But, they do violate the Lab’s ToS… may be. That is where the confusion is, the ToS. 

Podex Exchange is planning to resume/continue exchange service within Second Life™. They posted this on their site:

10.05.2013 Despite the dark clouds over independent third party exchanges Podex Exchange continues its normal work selling and buying L$. The only change is stricter security policy which can cause delays with some transactions. We are sorry for it.

We also want to assure our clients that not only their real money and linden dollars are save with us but also their personal data. Our policy of not requiring any registration to use Podex services have always guaranteed maximum security. We just have nothing to be stolen.

To remain in total compliance with Linden Lab regulations and The Financial Crimes Enforcement Network (“FinCEN”) guidance our legal office started preparing application process to become officially registered money services business (MSB).

Jacek Shuftan

It would seem their legal counsel believes any exchange operator that registers with FinCEN as a currency business will then be in compliance with the law and the Lab’s ToS. I’m not so sure. But, we may have to see how the lawsuits and court battles turn out before we know.

Some are complaining that their favorite exchange has stopped operations in SL and others seem to still be operating. I am guessing some are under the radar. During the last week I’ve heard of exchanges I’ve never heard of before. I suspect the same is true of the Lab. It will probably take time to find them all.

Some merchants are talking about a drop in sales. It might be a bit early for that to happen.

The long thread at SLUniverse is: 5/6 TOS change: the end of non-LindeX exchanges? One major take away from that thread is the dissatisfaction with the Lab’s Lindex. The time needed to get money out of the Lindex taking 5 to 10 days.

New World Notes has a new article out: Virtual Currency Legal Analyst: Linden Lab Has to Comply With New US Treasury Guidelines or Face Criminal Penalties. Hamlet is pointing out the problems of failing to register with FinCEN as a currency handler. The penalties would be motivation for me to make sure I was in compliance.

Solutions?

There some people talking about how they are getting around the problem. It seems prepaid MasterCard and Visa are working pathways. Seems the PayPal problem for foreign currency customers is credit cards and checking accounts in the customer’s native currency. Use of the pre-paid cards seems to mitigate the problem. But, I have no experience with that… so you are on your own.

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