Banking and In-world currency exchange

Some ideas we've been thinking about, and looking for feedback on. The goal would be to allow people a way to purchase L$ within Second Life.

- LL would allow "3rd party currency traders" to register with SL. There will be some requirements in place to qualify as a trader -- possibly a buy-in, or advance.
- LL would provide a "Buy L$" link in the viewer that allows residents to choose a trader (sorted by price) and how many US$ worth of L$ you want. Upon purchase, those L$ will just appear in your account.
- We bill your credit card and make the payment to a third party exchange site (e.g. GOM, IGE). This means that you don't need an account with IGE or GOM to buy currency. Purchases would be limited by max US$ per day, per month, and/or time as a user, etc. to prevent fraud.
- In a similar way, there will be a "Sell L$ for account credit" where the exchange will be between a 3rd party site and Linden Lab, and the US$ realized from the sale would be credited to your account.
- There would be no cost to the resident. 3rd party sites will pay LL a fee based on transactional volume.

Thoughts?

will the value of the linden go down? Yes probably.. so i wouldnt want this to happen.. also i wouldnt like the fact you can only transfer to account credit.. thats not good..

potential liability?

mixing an official sponsored currency exchange with *REALLY* aggregiously ripoff casino's may run LL afoul of *ALOT* of state gambling laws...

(actually the fact current SL casino's are ripoffs is an aside to this and even wholly monitored and fair casino gambling mixed with a currency exchange could set LL in serious trouble with gambling laws)

ooh and theres alot of people who use GOM now to pay off RL bills not related to SL... even some who sell lindens for food... they would be hurt by making all sales 'credits' towards LL accounts.. since alot of them only have 9.99 one time accounts anyway and have no use for the credits

Casinos would then be prosecutable under various state's anti-gambling laws, then? Will you provide us the proper reports and forms for reporting this on our income taxes? Will I need to fill out a W-4?

This amounts to removal of the TOS segment where Linden disclaims any material worth of in-world money and creations, I would think. And I am not a lawyer, but that would amount to Big Problems?

I guess casino's would have to get a license or whatever is involved in Cali to do that... Will LL give us the info on how to do that? Same with clubs too I guess... And people who cyber for $L's... Why don't YOU tell us what you think.. man...

Wonder what the SEC/CFTC would have to say about an 'exchange' popping up that is corporate-sponsored, and is tying a virtual currency to real dollars in some offical capacity.

Does Philip know about this proposal? I think he'd better if he doesn't already. Or at least review the legal implications, because you're trying to sponsor a new currency trading system, essentially.

Yea and tell us about them as well. How can this be opened for discussion when we don't know the implications. More info first.

I can see some major legal issues, as well as social issues. One of the features of SL is that the economy is not as tangled with the US$, as say, 'There' was.

If you plan on using GOM, it is outside of the game. You do not need to use it to play - the moment it's integrated, the societial norm, shifts towards that becoming a standard feature of 'how to play', which discriminates against those who cannot afford to, or want to. (as previously demonstrated by 'There'.).

SL should be structured so that these services do not need to exist, let alone become an integral component.

-Adam

ontop of a state casino license LL would need to have a way to apply someone's state gambling laws to them on a per user basis.

Aka someone from a state that prohibits online gambling would need to be barred from using a casino in game, and there would need to be ALOT of reform in the casino industry in SL as many of those machines out there would need to undergo rigorous code-approval and testing... people who's machines didn't meet meet payout requirements could be subject to large fines and potentially even jail terms

I object to this notion...

GOM and IGE already offer pretty simple mechanisms to buy/sell L$, especially with the GOM ATM's (which I'm surprised IGE hasn't mimiced).

Is Linden Lab a company offering a platform for 3D-streaming and metaverse creation, or is Linden Lab a credit card processing company?

Bringing in an interface to the 3rd party exchanges would basically mean that LL is going to process the CC transactions for these folks. Let GOM and IGE address that need themselves.

- Ace

My opinion is that if it ain't broke, don't fix it.

GOM and IGE are doing a pretty good job, I think.

There are numerous other problems developers should be addressing before jumping in into something that would no doubt complicate things not only for SL residents, but SL, Inc.

tito

NO, NO, NO!

VERY bad idea for LL as well as the entire community! Legally, socially, morally. I believe the currency trade should be left privatized as that is what will work best for all involved. If you need reasons why, see all the posts before this one.

Originally posted by Robin Linden --
Some ideas we've been thinking about, and looking for feedback on.
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Interesting thoughts Robin.


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The goal would be to allow people a way to purchase L$ within Second Life.
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People are able to do that now - via. GOM's inWorld ATM.

Did you mean to say " ...a way to purchase L$ within the SL client...?"


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- LL would allow "3rd party currency traders" to register with SL. There will be some requirements in place to qualify as a trader -- possibly a buy-in, or advance.
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I like this idea - any and all L$ currency trades have to register with LL/SL - and yes this should have some basic business requirements, verification, validation, etc. This would also apply to both current currency traders, as well as any new ones, should any want to jump in.

Once a currency trader is registered with LL, then, and only then, will they be permitted to have inWorld currency ATMs.


Not supportive of LL's further suggested involvement. Leave currency exchanges to the open market. Not supportive of LL opening the huge can-Oh-worms with other suggestions, other involvements, blurring distinction between L$ and USD$, gambiling, legal, tax, SEC issues, etc.


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Take a look at Project Entropia as well though folks


They have been buying and selling their money (values always at 10 on the dollar i think it was) for over 3 years now.

Of course they do not have casino's in game, so you dont run afoul of that.

But regarding casino's, who's state laws do you use? teh one where the server farm is hosted would be most likely, since thats how internet casino's work, and why they are usually located outside the US.

Remember folks, these casino's could be run by European players, or other countries, and US laws do not apply to them as they do to us.

So expand your thinking outside the US Centric view when considering these issues

Good point Arch.

State of Calif. law applies to LL - and all Calif. State tax and IRS rules apply also, and the Nevada & Calif. gaming commission and industries are players as well.

Nod, so all casino's will suddenly be "owned and operated" by foreign interest only.

Looks like its time for my texas hold'em game to become like a floating craps game

Thanks for the quick response! A couple points of clarification:

- the idea is to give more casual users, for example someone with a basic account who just wants to do a little clothes shopping, a way to easily get more L$. This doesn't stop GOM, IGE, etc. from running their own sites as well (and, in fact, offering cheaper prices on their own sites). Anyone who wanted to go directly to a 3rd party site would have that option, either on their site or through ATMs such as the current ones in-world.

- anything we decided to do in this regard would have to pass muster with the lawyers, so if there were any questions of violating gambling, SEC or other laws, we wouldn't do it.

YES YES YES! Please do this.

As someone who has more L$ than I need, I'd really love to have a quick way to directly deal with a company with whom I already have a business relationship (Linden Lab) to sell the L$ to offset my land tier fees.
Not having to deal with companies like PayPal taking a cut of it or waiting for 3 weeks for someone to send me a check would make me much much more likely to participate in this.

I say no. Unless Linden moves their business offshore, you'd be getting into a very shady, and questionable practice.

No business that is able to mint it's own virtual money should ever be the seller of that money if it's bought with real currency. Too much power in too few hands.

I think this is a very good idea. Heck, I suggested it to begin with
A lot of people still dont realize that they can just buy more money. They complain that they have no money and that things are too expensive when in reality it only costs them a few cents.

LL does not mint currency. You do. By making new accounts, you introduce money into the system. By holding events, you introduce money into the system. LL employees do not manually specify "today I feel like creating... one... million... dollars!".
Besides, LL is not going to sell money! Why does nobody get it!?
LL is going to put in a LINK to money traders such as GOM and IGE.

Some really good points here. I had suggested in another thread,

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that the Linden's should adjust the $L for Land Fee exchange rates dynamically so they reflect actual currency value. These suggestions are more radical than I had originally envisioned.

Here are my views:

I think this is a good idea, to a point. It is no different, in principle, to a listing in the "Find" interface allowing people to contact other people to participate in some form of exchange -- whether it is an event, contest, land sale, etc. It is a directory of currency sellers.

It is the additional step of facilitating the transaction that raises the potential problems -- other people in this thread pointed those out very well. However, if the legal issues are ironed out (e.g., gambling/casino winnings can be converted to US$ via Linden Lab software), then I see no real problems with allowing Linden Labs to offer us interfaces to convert and use currency to help us pay our bills (in or out of game).

For those that worry about SL economy being tangled with US $ - it seems to
already have this relationship. Developer incentives and L$s to offset land fees are two examples. People already use GOM and IGE to manage their balances.

Though it is a good question: Will facilitating these currency exchanges within the SL client affect the economy significantly? Example: a sub-set of people may decide to use the easier exchange mechanisms and suddenly be flush with Linden $ -- will they monopolize the market? Will we get unbearable inflation that makes Linden prices approximate RL prices?

As time passes and more people become aware of GOM and IGE, I believe it will be inevitable that people will amass large concentrations of L$. I think it alright for the Linden's to facilitate currency markets within the SL client -- though I worry about an uber-rich, mega class of SL players (though I worry about that in RL too )

D.

Ergh.

The only way I would approve of this is if Linden Lab essentially bought GOM lock, stock, and barrel. KEep it on a website, have zeppi run it, just put it under the main wing of the website. You'd get increased traffic and more liquidity of assets, without having a ton of unforseen consequences.

Any other way and you're going to send shockwaves through the economy, ruining it.

And please don't turn this into Project Entropia. Please.

LF