{"id":3110,"date":"2013-05-08T19:12:28","date_gmt":"2013-05-08T18:12:28","guid":{"rendered":"http:\/\/sl.governormarley.com\/?p=3110"},"modified":"2013-05-08T22:12:12","modified_gmt":"2013-05-08T21:12:12","slug":"third-party-exchanges-fallout-in-progress","status":"publish","type":"post","link":"https:\/\/sl.governormarley.com\/?p=3110","title":{"rendered":"Third Party Exchanges Fallout In Progress"},"content":{"rendered":"

The fallout from yesterday’s terms of service change blog post<\/a> is now in full swing. The outlook for third party exchanges looks bleak from the posts I’ve seen, but confusion still reigns due to the discrepancy between the blog post, which explicitly stated trading on thier party exchanges is not allowed and the actual new terms of service, which make no such reference. This issue is not just in the area of third party exchanges either, third party viewer developers have also been sent a message relating to the Buy L$ feature in their viewers.<\/p>\n

The problems started rather quickly, Maria Korolov over at Hypergrid business reported<\/a> that First Meta Exchange had announced<\/a> :<\/p>\n

“We are really sad to announce that we will not be doing any linden exchanges from now onwards. Due to the recent changes in SecondLife\u2019s Terms of Service we must SUSPEND ALL LINDEN TRADING IMMEDIATELY. We will be updating you via email with more information soon.<\/em>”<\/p>\n

Meanwhile other exchanges have ceased trading whilst seekig clarification on what the terms of service changes mean, ELDEXchange announced<\/a>:<\/p>\n

“you might have seen the changes of ToS regarding exchanges other than the Lindex. <\/em>We try to get more information about the consequences. Meanwhile we cant accept new sell orders. <\/em>We will inform you as soon as we have more information.<\/em>”<\/p>\n

VIRWOX, arguably the largest third party exchange announced<\/a>:<\/p>\n

“We have asked Linden Lab for clarification. Until we know what this all means, we have disabled deposits of Linden Dollars (the terminals will send them back), disabled the “Currency Shop” for Linden Dollar purchases, and disabled the withdrawal of Linden Dollars to Second Life. Other virtual currencies are not affected.<\/em>”<\/p>\n

Moneyslex announced<\/a>:<\/p>\n

“Linden Lab has recently changed their Terms of Service.Trading L$ as Third Party exchange Linden Lab interprets as “unauthorized” as “not permitted”.This would mean that we can at the moment not offer our service to Second Life residents.<\/em>”<\/p>\n

However as the confusion reigns, some third part exchanges are still operating.<\/p>\n

<\/p>\n

Podex exchange<\/a> seems to still be operating, although there are no statements from them on their website. DX Exchange<\/a> are also still running and they made the following announcement:<\/p>\n

“Following the new Terms of Service of Linden Lab, we have received many inquiries from customers. At this moment we did not receive an immediate notification from Linden Lab concerning the activities of\u00a0 DXexchange. However, we are in talk with other by LL previously approved exchanges to assess the situation. For now we will continue our activities as an exchange office.<\/em>”<\/p>\n

However, other exchanges have reported that they have been advised to cease trading. On the Second Life forum a user called xchange4ls Turbo reports that he has received the following email<\/a>:<\/p>\n

“As described on the Second Life blog, the updated Second Life Terms of Service disallow trading of Linden dollars (L$) on exchanges other than the LindeX. As an operator of a third party exchange, you should cease facilitating L$ trades on your exchange immediately to comply with the Terms of Service. Any virtual \u2018ATMs\u2019 or scripted objects in Second Life that are connected to your exchange should also be removed immediately.<\/em><\/p>\n

\u00a0Please be sure to read the complete updated Second Life Terms of Service and take the steps necessary to comply and keep your Second Life account(s) in good standing.”<\/em><\/p>\n

Over at SLUniverse, Zoha Boa reports<\/a>:<\/p>\n

“We run a small exchange for our residents. They could buy L$ via our tier terminal. I did contact my account manager if we are still allowed to do this and got the following reply:<\/em><\/p>\n

“We will shut down any resident for a violation of the terms of service if we discover they are trading L$ outside of the LindeX. “<\/em><\/p>\n

…..<\/em><\/p>\n

“The only authorized exchange is the LindeX.”<\/em><\/p>\n

\u00a0So we disabled our exchange. I did read also on a german forum that several exchanges got an email from LL to stop with it, remove all inworld terminals, …<\/em>”<\/p>\n

The issue isn’t just an issue for third party exchanges either, third party viewer developers have been roped in with Chalice Yao over at SLUniverse reporting<\/a> that Oz Linden sent the following message to the Open Dev list:<\/p>\n

“If you are a viewer developer, and your viewer includes use of a third party exchange for functions like ‘buy L$,’ it will need to be changed to use the LindeX instead.<\/em>”<\/p>\n

As I said, it doesn’t look good for the future of third party exchanges. The reasons are still open to speculation, there are some interesting comments in Inara Pey’s blog post on the subject<\/a>, with Inara suggesting FinCEN may be the reason behind these changes<\/span>, Inara suggesting that this may be nothing at all to do with FinCEN (See comments) or that it may be something else entirely, plenty of food for thought there.<\/p>\n

FinCEN is a central plank behind Vaki’s excellent post on the subject<\/a>. Vaki also points out how poorly drafted the changes to the terms of service are, which is something I most definitely agree with, confusion reigns because of the contradictory terms in the original blog post and the new terms of service. This is exemplified when you look at the new and old section of the terms of service (with thanks to Sassy Romano’s forum post<\/a>):<\/p>\n

The New ToS<\/strong><\/span><\/p>\n

” 5.3 There are other exchanges that are operated by third parties on which Linden dollars are exchanged.<\/em><\/p>\n

Third party exchanges are not authorized by Linden Lab and Buying or Selling Linden dollars on third party exchanges are not authorized transactions. Third party exchanges are wholly distinct from both the LindeX exchange and Linden Lab and they have no affiliation with Linden Lab. We do not endorse or otherwise guarantee the legitimacy of the Linden dollar transfers offered on them, and we are not liable for purchases of such Linden dollars. Buying or Selling Linden dollars anywhere other than the LindeX is done so solely at your own risk.<\/em>”<\/p>\n

The OLD ToS<\/strong> <\/span><\/p>\n

“5.3 There are other Linden dollar exchanges that are operated by third parties.<\/em><\/p>\n

\u00a0Linden dollars are occasionally Bought and Sold on third party exchanges, which are wholly distinct from the LindeX exchange. Unless specified by Linden Lab, these exchanges have no affiliation with Linden Lab. We do not guarantee the legitimacy of the Linden dollar transfers offered on them, and we are not liable for purchases of such Linden dollars. You purchase Linden dollars from such sites at your own risk. If you Buy Linden dollars that are traced to unauthorized credit card activity or other fraudulent activity, we will recoup these Linden dollars from your Account.<\/em><\/p>\n

\u00a0Purely for informational purposes, we may list on our Websites third-party exchanges that use our “Risk API” tool. The use of the Risk API may lessen the occurrence of fraud on those exchanges; however, in no event do we endorse, guarantee or insure your purchases from these unaffiliated exchanges.<\/em>”<\/p>\n

Comparing the new and old sections, you can see why some people don’t think these changes are that serious, on the face of it, it just looks like Linden Lab are emphasising that if you use a third party exchange, you have no recourse at all from Linden Lab. However the posts and comments elsewhere suggest this is a far more serious situation.<\/p>\n

Whatever the outcome, Linden Lab really really really need to sort out their communications.<\/p>\n

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