On Friday, March 13th, Hypergrid Business relayed news that Linden Lab has called a halt to the use of Linden Dollars outside of their own platforms. The news itself came from the OpenSim based Avination, which has for several years provided the means to exchange Linden Dollars to their own currency (C$) via the use of an in-world ATM mechanism.

In an announcement, which has also been distributed to their users via e-mail, Avination state: “Due to recent interaction with Linden Labs, we regret having to inform you that the transfer of Linden Dollars to Avination is no longer available, including the payment of your Avination sims via the Avination ATMs.”

The announcement goes on to further read in part:

Following discussions with Linden Labs they have advised that any use of Linden Dollars in payment for currency of ANY other virtual world, or for external services which are not used in SecondLife [sic] is in violation of the TOS …



According to Linden Labs [sic], users of SecondLife [sic] must cash out through LindeX before using real currency to pay for services not rendered within SL.

This move is being linked to matters of potential liability for the Lab. In 2013, the company moved to put greater controls on the re-sale of Linden Dollars through third-party exchanges. At the time, there was a lot of speculation (including my own) as to whether this was in response to FinCEN recommendations or as a more general means of dealing with issues of fraud, etc.

While the Lab did subsequently allow third-party operations to continue to sell Linden Dollars to users (said L$ having been purchased from the Lab), a prohibition was placed on such operations to either buy L$ amounts from users or cash them out of the platform; a move which allowed the Lab to demonstrate it can effectively monitor and control the outward flow of money from Second Life.

However, it might be said the the use of in-world scripted devices such as “ATMs”, which enable the direct conversion of Linden Dollar values to other virtual currencies which can then be cashed out, potentially gives rise to liability exposure for the Lab, should it be shown that such mechanisms might be used for illegal purposes. Thus, the Lab has made this move to distance itself from such a risk.

In their announcement, Avination also suggest that this move may affect how Second Life users can pay for external services such as audio stream rentals in the future. Whether this is the case or not remains to be seen. Most of these services provide such a payment mechanism through a registered Second Life account, without any supplemental transfer of the value of the payment outside of the platform (the funds can effectively only be cashed-out via the Lab’s LindeX). Thus, there wouldn’t appear to be any issues with services working in this way to continue to do so. However, this is purely speculation on my part, and we’ll have to await official word from the Lab.

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