By Bixyl Shuftan
In the aftermath of
Linden Labs changing it's Terms of Service concerning Third Party exchangers of Linden dollars,
just about all have closed their doors. A number gave statements saying they were wary of the Lab's wrath, such as the DX Exchange, "the TOS gives us a 30 day period … However, we so realize that with blocking our avatars Linden Lab can disable our business within seconds. We also realize that we put our clients at risk to lose their Lindens in case we annoy Linden Lab." CrossWorlds stated that they would complete orders that had already been placed. But most were no longer making new transactions.
Two Third-Party exchange services remain. One is AnsheX, owned by noted Second Life baron
Anshe Chung. Their only response from them on the matter was reportedly their support staff saying "nothing has changed" and they were buying and selling Lindens as before. The other is the Podex Exchange, owned and run by Jacek Shuftan. Jacek lives in Poland in real life, but has registered Podex as a business in Delaware USA. In a
press statement over the weekend, Podex stated the following:
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).
So why did Linden Lab change their terms of service? In his "Modern Payment Systems" blog, Alex Kadochnikov stated as an issuer of virtual currency,
Linden Lab had to register with the Financial Crimes Enforcement Network (FinCEN). The penalties of not registering, were listed as pretty steep.
(a) Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
But would Linden Lab really have gotten in trouble because of unregistered Third-Party exchangers? It seems they're not taking chances. In the comments following his article, Kadochinikov didn't feel all the panic was necessary, "I really do not know why they (won't) just register and spend a few dollars in compliance with regulations."
Hamlet Au expressed puzzlement as to why "the company hasn't specified this is the reason for it's policy change." A reader commented that the Lab doesn't normally explain things to the residents these days, "the company has abandoned any pretense at communicating with actual customers, so it may just be their usual stony silence."
Perhaps as time goes on, more Third-Party exchangers will register in compliance with FinCEN. But for now, two exchangers independent of Linden Lab remain open for business as an alternative to LindeX. So residents unable to get Lindens from the Lab still have two alternatives. And those reluctant to deal with Anshe Chung still have Podex.
The Podex Exchange (
http://www.podex.info/) is a sponsor of Second Life Newser.
Sources: Google sites, Money Payment Systems,
Bixyl Shuftan
