[Opensim-users] Advantages of grid using OMC or Podex vs using Paypal + fictional currency?

[Erik Gordon Bainbridge]

You're correct, but the problem is that it's not clear exactly who needs to register. FinCEN hasn't clarified their regulations yet for virtual worlds.   I've spoken with FinCEN and I've read the rules. The rules were written for Bitcoin and define three types of participants in a virtual currency: 1) currency administrators, 2) currency exchangers, and 3) individual users.  The first two need to register with FinCEN but users do not.

It's clear that currency companies, and virtual worlds with their own currencies like Second Life should register with FiNCEN, but it doesn't cover virtual worlds that don't administer or exchange their own currencies.  Under these circumstances, under the rules a grid owner might be considered a user,  except for the fact that the rules define a user as "a person". .I've also found that there's disagreement in the OpenSim community about whether foreign-based companies like  Virwox and Podex need to register with FinCEN, though my personal opinion is that they do need to.

Until FiNCEN issues some clarification about its policy towards virtual worlds, it's best to err on the side of caution.  However I'm trying to balance that with not being happy with a strictly Paypal implementation in a grid  (without using the Paypal currency module, with introduces other risks and problems).

Erik Gordon Bainbridge Author, virtual worlds builder/reporter
www.VirtualMarin.com
www.ErikBainbridge.com
www.examiner.com/second-life-in-national/apollo-manga
www.WarriorBrothers.com
www.MountainBikeRoots.com

> Correct me if I'm wrong, but aren't virtual currency providers required
> to register with the government now (ala BitCoin)? I know on the SL side
> of things they made some changes wherein those who cash out over a 
> certain amount yearly need to register their tax information.  Maybe it
> would be worth running this past your lawyer or accountant?
>
>
> On 12/18/2014 05:18 PM, Ethan Grammatikidis wrote:
>> On Thu, Dec 18, 2014, at 02:07 PM, Erik Gordon Bainbridge wrote:
>>> What are the advantages and disadvantages of using Paypal as a grid 
>>> currency rather than OMC or Podex?  I'm interested in the 
>>> perspectives both of people who sell in grids and of grid owners.  I 
>>> am building a grid for a company that wants to use a Kitely model of 
>>> fictional currency combined with Paypal instead of using OMC or 
>>> Podex.  I think the complexity of setting up fictional currency + 
>>> Paypal could outweigh the advantages.  I need both perspectives so I 
>>> can give my client the best advice.
>> What? OMC and Podex both offer "fictional currency" backed by real 
>> money. Any grid with an exchangeable currency provides "fictional 
>> currency" backed by real money in one way or another. Your choice is 
>> whether to contract with a company (OMC or Podex) which specializes in 
>> this, or to making your own system.
>> Making your own system doesn't just mean writing code, you will also 
>> have to choose what rules to apply. If I were doing this, I'd think 
>> deciding on the rules would be harder work than writing the code.
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