Run, Linden Lab Run!


When those bullies were a-chasin’ Forrest Gump from the school, he had them braces on his legs and he was a-tryin’ a get away.  Jenny said “Run, Forrest! Run!” And Forrest did just that.  He ran.

What would force Linden Lab to burn their “Risk API”? 

What is the Exchange Risk API?

 The Exchange Risk API is a read-only web service for Linden dollar exchanges use to evaluate the risk of a transaction. The Exchange Risk API allows legitimate third-party Linden Dollar exchanges to operate with relatively low fraud activity. This is necessary because user-to-user Linden Dollar exchange activity is a consistent target of attack for attempted fraud and similar malicious activity.

The API returns Linden Lab’s determination of the risk associated with the purchase of Linden Dollars in a particular transaction. It uses a complicated algorithm to identify accounts with nonstandard activity and determine the risk of fraud compared to standard activity, with respect to trading Linden dollars (L$). Use of the Risk API helps us and other exchanges identify fraud before it happens. This system is our best attempt to identify and impede risky behavior, but nothing is foolproof.

The API contains a single simple function that returns a binary value expressing the risk that Linden Lab associates with any particular transaction. Your exchange is not required to use the Exchange Risk API. However, all exchanges of Linden Dollars for real currency that are not conducted on LindeX are subject to the Exchange Risk Policy.

If you would like to receive the information necessary to use the Exchange Risk API, please send your name, Second Life account name, and the website URL that facilitates your exchange, to our Risk API program. Exchange Risk API Policy.

If you logged in to your dashboard today and went to perform any function on the Lindex you received a message that you needed to accept the new TOS first!  The new TOS contains changes that prevent third party services from allowing residents to “cash out”.  You know, that “cash out” that Linden Lab has forever claim that doesn’t exist.  You can’t exchange Linden Dollars for real dollars…. (yeaaaah riiiiight).  Their new blog post on the topic says that the updated Terms of Service make it clear that trading of Linden dollars (L$) on exchanges other than the LindeX, Second Life’s official L$ exchange, is not authorized or allowed.

So all of those 3rd party service that allowed residents to “cash out” do not have access to the Risk API.  They cannot provide service to allow residents to exchange their Linden Dollars for real dollars.  Well I suppose they could, but without Risk API they have no way of knowing if an account is in good standing or not and they also risk having their account suspended or removed by Linden Lab.

Now it’s true you can “cash out” in the Lindex with Linden Lab.  It’s not instant like these 3rd party services but you’ll have your real money in your PayPal account within a couple of weeks in most case. (Yawn.)

But what would make Linden Lab make such a sudden and disruptive change?  There are a couple of theories in play.  First of all, there is a big fat lie in the Second Life Terms of Service.  It’s already been blogged about.  It’s that tall tale that says

You acknowledge that Linden dollars are not real currency or any type of financial instrument and are not redeemable for any sum of money from Linden Lab at any time.

How are residents supposed to acknowledge that when it’s a lie?  Linden dollars have been redeemable for sums of money for years!  Residents have made thousands and in some cases millions from redeeming their Linden dollars through these 3rd party exchanges and from Linden Lab for money!  What do you mean Linden dollars are not redeemable for money? Duuuuuhhhhh!

So the first theory is that Linden Lab has lost a certain amount of control over their records.  If the IRS is knocking, Linden Lab only has to reveal so much if anything to them without lawyers and robes getting involved and if that happen we’d all know about it! This theory guesses that things are getting heated at the lab! So in order to keep their little lie on taps Linden Lab has to make sure that the IRS or other interested parties isn’t able to interrogate these 3rd party services.  They’ve completely deleted any trace of Risk API (except for Google cache…as if no one can archive it!)  They’ve pushed the self-destruct button and turned their backs on the 3rd party exchanges.

The second theory is that Linden Lab sees all the revenue they are losing when residents use these 3rd party exchanges to cash out.  This is money that the Lab could be using to line its’ pockets!  Lindens Lab can barely handle the cash outs they have now. It takes a week on average to get your funds delivered to your PayPal account. How will they handle the thousands of resident that were using 3rd party service to cash out when they have no choice but to use the Lindex?

It doesn’t really matter which theory is correct. But know that one of these theories has to have some truth to it. They didn’t just make this change on a whim or for the fun of it. There has to be some financially or legally threatening matter that caused it. But knowing the Lab we will never get the whole bit of truth. We only get the smoke screen that looks like a slight change in the TOS.

So now we just sit and watch as Linden Lab is on the run! I wonder if they have a shredder or if they are using a lighter to burn all the evidence of cash outs.

Run Linden Lab Run!


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