The Top 20 Controversies in the 15-Year History of Second Life

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Note: to see my companion list of the top 20 success stories in the 15-year history of Second Life, please click here.

This list of historical Second Life controversies is purely subjective, and based on user feedback to questions I asked on the official SL user forums, SLUniverse.com, and on this blog. The items on this list are sorted (roughly) in chronological order. If you think I’ve forgotten something particularly noteworthy that should be on this list, please leave me a comment below, thanks!

1. The Prim Tax (2003)

Back in the earliest days of Second Life, there was a prim tax. This official description of the prim tax comes from a notecard titled “FAQ – Economy And Taxes 02/04/03”, discovered at the Governor’s Mansion:

The tax for maintaining objects that you own in the world is on a per-primitive basis, with a sliding rate that increases both with the size and height of each primitive. The per-primitive tax ranges from L$1 per week for a small object at ground level to L$30 or more per week for a 10 meter box 20 meters above the ground. The exact tax rate will continue to evolve and be tuned over time. People with large, elevated structures may want to rethink their designs before the taxman comes. (This sliding tax scale allows us to use taxes as an allocation tool, allowing most people to own and easily maintain many objects in world, but castles in the sky will be rare. Our design goal is to encourage density but make objects which are highly visible (being both big and tall) more pricey to better match the aesthetic impact and computational expense associated with their existence.

From the History of Second Life:

In order to restrict simulator resource usage, a tax system was introduced which required every Resident to pay a weekly fee, depending on the prims they had rezzed inworld. This system was easy to trick by packing all prims into the inventory on payment due day, then re-rezzing them again a day later.

According to a chapter titled A Cultural Timeline in the book Second Life: The Official Guide:

Second Era – Summer 2003: Revolution!

(This refers to the prim tax which was imposed, according to the book and apparently according to the Lindens to “…prevent residents from overheating the servers with too many objects.”  Then:

Objecting most strongly to Linden’s tax policy was Americana, a group devoted to creating tributes to US landmarks.  Feeling punished for their public works project, Americana unleashed a protest suitable to their name, dropping giant tea crates across the world and setting ther American landmarks on fire.  A cat named Fleabite Beach sent out a Thoreau-style proclamation against “Mad King Lindent,” and led the revolutionaries into the streets with muskets and signs emblazoned with the words “Born Free: Taxed to Death.” (A photo is included that shows some of the protestors.)  Much of he citizenry was drawn into the insurrection, either as rebels or redcoat “Linden loyalists.” pg.282)

According to Second Life: The Official Guide, “In December 2003, the revolutionaries won; an entirely new tax system based on land ownership sans the prim tax was introduced in a subsequent update.”

2. Copybot (2006)

A CopyBot is any Second Life client which has the ability to export copies of in-world items without any permissions checks. In 2006, news that Copybot programs were in existence caused a major upoar among SL content creators, who saw it as a threat to their livelihood. A Mashable article notes:

In a story that sounds like a sci-fi plot, a script called CopyBot was released that enables users to replicate items in-world. That spells trouble for those who make a living, or at least a second income, selling clothes, cars, furniture and other goods in the virtual world – why buy something when you can clone it for free? As plenty of newspaper articles have pointed out, the SL economy is fairly large – they did $491,989 USD in transactions in the last 24 hours, which is likely lower than the daily average.

Even worse, Copybot was created by libsecondlife, an open source project supported by Second Life owner Linden Labs to reverse engineer the SL software – although it has a wide range of applications, the one that’s causing problems is the ability to clone any object or avatar in-game, even those marked as “no copy”. The code has since been pulled from the libsecondlife website, but not before it was dispersed widely.

Yesterday, a group of shop owners closed their stores in protest, and anti-CopyBot t-shirts and flags appeared. The group claim that there were 600 stores closed, although it’s hard to confirm that figure. It seems that CopyBot may have been modified by someone outside of libsecondlife to be used in this way, but that hasn’t stopped residents blaming Linden Labs, with banners reading: “Linden Lab once again did hurt our world (sic?)”. Shopkeepers also threatened a lawsuit against Linden yesterday, while Linden said in their official blog this week (seems to be offline at the time of writing) that anyone using CopyBot to steal objects would be held responsible for copyright infringement.

Linden Labs have made their in-world economy a massive selling point, and successfully hyped their numbers in the press, with an endless stream of articles about how entrepreneurs are making a living in-world, not to mention the size of the SL economy and neverending stories of companies setting up offices there… As a result of all this coverage, they’ve got to handle the backlash when that economy is threatened, especially when the company itself is being blamed.

3. Anshe Chung Griefer Attack (2006)

This list would not be complete without at least one memorable griefer attack. As Engadget reported:

Anshe Chung, the avatar for Second Life millionaire (in real money, not Linden Bucks) Ailin Graef, was giving an interview to CNET at their virtual offices when a griefer sent “animated flying penises” at the building for 15 minutes. After relocating to Chung’s own theater, the Prick Assault followed and managed to crash the server.

While the perpetrator’s intentions are unknown, the article speculates that Chung, who has turned virtual real estate into an extremely profitable venture, has made many enemies in her rise.

4. Virtual Pedophilia Scandals (2007)

The virtual pedophilia uncovered by two different news reporters in Second Life was a public relations disaster of the highest order for Linden Lab. Jason Farrell, an investigative reporter for Sky News in the U.K., remembers what happened:

Eight million people inhabited one virtual world called Second Life. The possibilities for wrongdoing were very real.

So when my editor asked me to create an avatar and investigate crime in this virtual world, it was not long before one user contacted me with a disturbing tale.

Her avatar, called Harmony, was a winged angel. We met on a virtual island where she told me about the Second Life place called “Wonderland”.

“It’s a paedophile ring,” she said. “They do all sorts of dreadful things.”

Wonderland was a candy-coloured children’s playground with a mix of child and adult avatars. The adults were tall and domineering, the children petite but sexually attired in mini-skirted school uniforms.

One could only assume the child avatars were controlled by adults.

The characters had virtual homes equipped with a perverse mix of cartoon videos and sex toys. They could simulate any sexual fantasy they desired.

I was as close to seeing inside the mind of a paedophile as I ever wanted to be.

Virtual worlds are secret places where you can hide warped fantasies but also ring-fence real images and even video footage of child abuse.

There were no email address, no real names and no electronic trail on your computer. If you viewed an image in Second Life, it stayed in Second Life.

It was a place where potential paedophiles with the beginning of a dangerous obsession could develop it, role-play it and gain acceptance of it from others.

The police’s Child Exploitation and Online Protection (CEOP) unit was horrified by what I’d discovered.

“It will fuel their desire to do it for real,” said the unit’s head Jim Gamble.

“They can’t pretend it’s only their avatar doing it because who is controlling that avatar?”

Lindon Labs, the creators of the Second Life platform, closed down Wonderland the day after our report went out but the story did not end there.

That day I changed my avatar’s appearance and went back to the now empty domain. The usual individuals were still turning up, unsure of what had happened.

“Never mind,” said one, and handed me a list of 50 other “child-play” areas within Second Life.

In a second report I visited more, equally shocking islands. Here was a window into the worst aspects of depraved minds.

About the same time (2007), a German TV news program uncovered more shocking behaviour:

Second Life is being investigated by German police following allegations that some members are trading child abuse images in the online world.

The investigation follows a report by a German TV news programme which uncovered the trading group and members who pay for sex with virtual children.

The police are now trying to identify the Second Life members involved.

Linden Lab, the creator of Second Life, said it would help identify users and pass on details to prosecutors.

Second Life, as its name implies, is a virtual world in which members create an avatar and then use that character to live out a separate existence.

The investigation was carried out by Nick Schader from the Report Mainz news programme who is also a member of Second Life.

Mr Schader was asked to pay to attend meetings where virtual and real child pornography was being shown.

Members of this group also offered to put him in touch with traders of real child pornography.

The investigation also uncovered so called “age play” groups that revolve around the abuse of virtual children.

Information gathered during the report was passed to the prosecutor’s office in Halle who said it hoped to track down the German Second Life user who shared the images of virtual child pornography.

Peter Vogt, the prosecutor in the Halle, told the Deutsche Presse-Agentur agency: “I assume we are going to catch this user fairly quickly.”

Under Germany law possession of “virtual” child pornography is punishable by up to three years in jail.

Other news media seized on the reports from German TV and Sky News:

Linden Lab responded to the crisis by creating an official Ageplay Policy, where people involved in ageplay and virtual pedophilia activities were banned from the platform:

Under our Community Standards policy, real-life images, avatar portrayals, and other depictions of sexual or lewd acts involving or appearing to involve children or minors are not allowed within Second Life. When detected, individuals and groups promoting or providing such content and activities will be subject to sanctions, which may include termination of accounts, closure of groups, removal of content, and loss of land or access to land.

There are three key aspects involved in these materials or acts that are in breach of the Community Standards:

  • Participation by Residents in lewd or sexual acts in which one or more of the avatars appears to represent minors (or the depiction of such acts in images, video, textures, or text) is a violation of the Community Standards.
  • Promoting or catering to such behavior or representations violates our Community Standards. For instance, the placement of avatars appearing to represent minors in proximity to “sex beds” or other sexualized graphics, objects, or scripts would violate our Community Standards, as would the placement of sexualized “pose balls” or other content in areas depicting playgrounds or children’s spaces.
  • The graphic depiction of children in a sexual or lewd manner violates our Community Standards.

Linden Lab reserves the right to immediately terminate the accounts of Residents who violate these standards.

Warning: Any images, chat, or other conduct that leads us to believe actual minor children are involved will lead to swift action, including reporting to the appropriate authorities.

5. An FBI Investigation Leads to a Ban on Gambling (2007)

In early 2007, there were various news reports that the FBI visited Linden Lab to investigate gambling on the platform:

FBI investigators have visited Second Life’s Internet casinos at the invitation of the virtual world’s creator Linden Lab, but the U.S. government has not decided on the legality of virtual gambling.

“We have invited the FBI several times to take a look around in Second Life and raise any concerns they would like, and we know of at least one instance that federal agents did look around in a virtual casino,” said Ginsu Yoon, until recently Linden Lab’s general counsel and currently vice president for business affairs.

Second Life is a popular online virtual world with millions of registered users and its own economy and currency, known as the Linden dollar, which can be exchanged for U.S. dollars.

Yoon said the company was seeking guidance on virtual gaming activity in Second Life but had not yet received clear rules from U.S. authorities.

The FBI and the U.S. Attorney’s Office for Northern California declined comment.

Hundreds of casinos offering poker, slot machines and blackjack can easily be found in Second Life. While it is difficult to estimate the total size of the gambling economy in Second Life, the three largest poker casinos are earning profits of a modest $1,500 each per month, according to casino owners and people familiar with the industry.

The surge in Second Life gambling coincides with a crackdown in the real world by the U.S. government, which has arrested executives from offshore gambling Web sites.

Most lawyers agree that placing bets with Linden dollars likely violates U.S. anti-gambling statutes, which cover circumstances in which “something of value” is wagered. But the degree of Linden Lab’s responsibility, and the likelihood of a any crackdown, is uncertain.

Linden Lab responded later that year with a comprehensive Wagering Policy that banned gambling:

It is a violation of this policy to wager in games in the Second Life® environment operated on Linden Lab servers if such games:

  1. Rely on chance or random number generation to determine a winner,
    OR
  2. Rely on the outcome of real-life organized sporting events,

AND provide a payout in

  1. Linden Dollars (L$)
    OR
  2. Any real-world currency or thing of value.

This includes (but is not limited to), for example, Casino Games such as:

  • Baccarat
  • Blackjack
  • Craps
  • Faro
  • Keno
  • Pachinko
  • Pai Gow
  • Poker
  • Roulette
  • Sic Bo
  • Slot machines

This policy also includes sports books or sports betting, including the placing of bets on actual sporting events against a book-maker or through a betting exchange.

Linden Lab will actively enforce this policy. If we discover gambling activities that violate the policy, we will remove all related objects from the inworld environment, may suspend or terminate the accounts of residents involved without refund or payment, and may report any relevant details, including user information, to authorities and financial institutions.

Linden Lab also set up a detailed policy regarding “skill gaming”, which allowed for certain restricted-access sims to have legal games based on skill rather than chance:

  • “Skill Game” or “Skill Gaming” shall mean a game, implemented through an Inworld object: 1) whose outcome is determined by skill and is not contingent, in whole or in material part, upon chance; 2) requires or permits the payment of Linden Dollars to play; 3) provides a payout in Linden Dollars; and 4) is legally authorized by applicable United States and international law. Games in which Second Life residents do not pay to play are not within the scope of this Skill Gaming Policy. “Skill Games” are not intended to include and shall not include “gambling” as defined by applicable United States and international law.

To this day, skill gaming regions are among some of Second Life’s busiest areas.

6. The Saga of Woodbury University (2007-2010)

The virtual campus of Woodbury University was first shut down in 2007, and after they had started back up, was shut down for good in 2010. According to the Woodbury University article in the Second Life Fandom Wiki:

Woodbury University is a university in Burbank, California, as well as group in Second Life run by students and faculty of that university’s School of Media, Culture & Design. It is supervised by Dr. Edward Clift, Associate Professor and Chair of Communication at Woodbury University

Woodbury University established a virtual campus in Second Life in 2006. The campus was described as a “free and open place where avatars can express themselves in a loosely moderated environment”. The membership of the group comprised nearly 600 people by April 2010, some of whom were affiliated with the real life university and some of whom were not. The group attracted controversy, facing accusations of participating in griefing by controversial SL blogger Prokofy Neva from 2007 onwards. In July 2007, the Woodbury University campus was destroyed by Linden Lab.

On 20th April 2010, both the Woodbury University group and the four sims owned by Woodbury University, as well as additional group land holdings and sims and parcels owned by some of its members, were deleted or confiscated by Linden Lab, while the accounts of the upper management of the group were banned. The ban was covered by media like The Chronicle of Higher Education and US News & World Report. Dr. Clift told The Chronicle of Higher Education that Woodbury University’s virtual campus “did not conform to what Linden Lab wanted a campus to be”.

The Chronicle of Higher Education wrote:

Woodbury University’s virtual campus in Second Life was torn down yesterday by Linden Lab, the company that operates the virtual world, and the accounts of several students and professors were blocked. The tale involves virtual superheroes, accusations of vandalism, and conflicting ideas of what a campus should look like in a virtual world.

“Linden Lab has decided to no longer support Woodbury University in Second Life,” said an e-mail notice sent to Edward Clift, dean of the university’s School of Media, Culture & Design. “We are making this decision based on historical and recent events that constitute a breach of the Second Life community standards and terms of service. We ask that you please respect the decision and do not take part in the Second Life platform in the future.” No further details were provided.

This is the second time that Linden Lab has removed Woodbury’s virtual campus. About three years ago, the company wiped out the university’s presence, saying that the university had violated the unspecified parts of the terms-of-service agreement. The university decided to rebuild through a reseller of Second Life land, though by doing so it no longer received Linden Lab’s education discount. Woodbury says it was paying about $1,000 a month for the virtual land.

Yesterday Mr. Clift found his account on Second Life banned, meaning that his virtual alter ego, MC Fizgig, was no more.

Linden Lab officials refused to comment on the matter when contacted by The Chronicle. But the reason appears to have involved a longstanding dispute between avatars affiliated with the university and a group of online vigilantes called Justice League Unlimited, a reference to comic-book supeheroes.

Here’s what happened, according to an account posted online by Peter Ludlow, a philosophy professor at Northwestern University:

For years Second Life has been occasionally struck by online vandals, known as griefers, who stage disturbances in the virtual spaces, such as placing giant swastikas in public areas. In response, some users decided to seek justice and help get griefers kicked off of Second Life. Their group, Justice League Unlimited, is led by an avatar named Kalel Venkman, who is designed to look like Superman.

Woodbury has long encouraged anyone to use its Second Life campus to try experimental activities. At some point, one or more griefers became affiliated with the university in Second Life. The Justice League, concluding that Woodbury was responsible for the misbehavior, lobbied Linden Lab to block the virtual campus.

In an interview today with The Chronicle, Mr. Clift said the university had never encouraged or condoned vandalism. Its virtual campus included educational spaces designed mostly by students, including a mock representation of the former Soviet Union and a replica of the Berlin Wall. “It was a living, breathing campus in Second Life,” he said.

The professor said he felt that the virtual campus did not conform to what Linden Lab wanted a campus to be—with buildings and virtual lecture halls. And, he said, company officials objected to letting any users become affiliated with the virtual campus, whether or not they were enrolled at Woodbury. Mr. Clift said he felt that allowing a diverse group of participants and setting up an open facility was the best fit for the university’s mission.

“Woodbury is sick of this,” he said, referring to the ban. “Our brand is being maligned, and our 125-year mission is being trampled on.”

Jordan Bellino, a senior at Woodbury who had been an organizer of the virtual campus, said the incident suggests the dangers of online meeting spaces’ being run by companies, which get to decide who participates and who doesn’t. “It took years and thousands of dollars to make that [virtual campus] happen,” he said, “and it all vanished in a matter of an hour because Linden Lab pushed a button.”

Meanwhile, many people in Second Life expressed on blogs that they were glad to see the virtual campus go, arguing that it had been a haven for troublemakers in the virtual world.

7. Identity/Age Verification and Aristotle (2007-2013?)

After the ageplay scandal, Linden Lab announced that they were instituting an identity/age verification system:

The introduction of identity verification (IDV) will also help ensure that minors do not gain access to restricted content within Second Life, which is intended for users aged 18 or over. Access to Second Life content flagged as ‘Restricted’ will be available only to those whose age has been verified as being over 18.

Verification technology and data services provider, Aristotle, will provide its widely used Integrity Identity verification technology, which launches in Linden Lab’s beta today, before a full rollout to all Second Life Residents.

The decision was highly controversial at the time. Around 2013 or so, the system was discarded.

8. SL5B (2008)

SL historian (and child avatar) Marianne McCann tells us about the Second Life 5th Birthday (SL5B) celebrations:

[Linden] Lab wanted to change the focus of the birthdays, and “clean it up,” presumably with the notion of attracting outside eyes. To that end, many communities (kid avatars, BDSM, Gor) applications to display were “respectfully declined.” Of those, the one that caused the loudest roar were kid avatars (sorry, part of that was very much my doing). After the news went public, the SL arts community staged big protests on their SL5B parcels, while kid avatars created a successful event of their own, Kids5B.

After some pressure, the lab relented to a point, allowing some child avatar displays, but disallowing *some* content, such as any photos that showed a child avatar in the same frame as an adult avatar, or any that showed a child avatar in the same frame as a bed — no matter the context (for example, don’t post a photo of your adult and your kid avatars, or “playing in your room” with a bed in the background). This led to renewed protest, and eventually, they relented on this rule as well.

SL5B was *also* the first birthday event with M Linden, and where Mitch Kapor gave the infamous “pioneers versus settlers” speech, essentially telling existing players that it was time for them to step aside and let the “real” SLers in.

9. OpenSpace Price Change (2008)

OpenSpaces were another public relations disaster for Linden Lab:

Linden Lab, for a long period, offered OpenSpace regions to users: regions which were purchased in packs of four, with all four running on a single CPU core, intended to be placed next to an existing region to create the effect of larger size. The fee for 4 OpenSpaces was identical to that for a single private region. However, in March 2008, this rule was modified to permit OpenSpaces to be bought individually and placed elsewhere, as well as increasing the prim load each one could handle. OpenSpaces were made available for a US$415 downpayment plus a US$75 monthly fee.

In October 2008 Linden Lab announced that the OpenSpaces being used for this purpose were being misused; there was in fact no technical throttle limiting their usage. Linden Lab raised the monthly fee per OpenSpace to US$125, the same cost as half a region; added an avatar limit of 20; and renamed it to Homestead.

A week after the initial announcement Linden Lab stated its intention to add technical limits. A revised Openspace product, with far fewer prims, a no-residency rule, and costing the same monthly amount, was announced.

In May 2009, Linden Lab announced they were “grandfathering” OpenSpace sims (now rebranded as “Homesteads”), after a protracted protest movement caused a major amount of negative publicity and funded potential litigation.

(source: Criticism of Second Life article, Wikipedia)

Engadget reported:

Second Life users are already calling it Second Life’s second revolution. Outside of Linden Lab’s in-world Land Team offices, capacity crowds of users have been gathered through much of the day, though there’s been nary a Linden Lab staffer in sight. People are cursing, newcomers are asking for protest signs, and there’s angry chatter in over a dozen languages. There are a lot of Europeans here, which is not unexpected. They have to pay VAT on top of any additional costs.

There is talk about switching the signs and banners for flaming torches and pitchforks, because, if nothing else Second Life users find value in tradition. There are even discussions about picketing Linden Lab’s Battery Street office in San Francisco.

All of this started yesterday at 6PM SLT (US Pacific time) when Jack Linden, head of Linden Lab’s land team, announced a price-rise to void simulators (known to Linden Lab as Openspace sims). The reaction since then has been … robust.

Void/Openspace simulators are low-capacity simulators that were once known as ‘quad’ simulators (because they ran four sims to the CPU rather than the usual one). Void simulators were used for coastlines, patches of ocean, rolling plains and other environments where there was a need for simulated space, but no need for construction.

Second Life pilots, sailors, sightseers and travellers used void simulators extensively. Bought in packs of four, they could add spacious regions for all these activities to private estates. That is, until March this year, when Linden Lab increased the capacity limits on those simulators, and changed the pricing model, allowing them to be purchased individually. People who valued space more than raw capacity snapped up the new offering, building out vast territories and themed communities.

If you’ve heard Mark Kingdon or John Zdanowski (Linden Lab’s CEO and CFO respectively) talking at conferences and to the press about the boom in land area in Second Life lately, that seems to be a direct product of the Void/Openspace simulator market. The announced price-rise seems to shoot all of that PR in the foot.

Linden Lab has not apparently previously concerned itself much with changes that might cause users to sell their land or simulator space and abandon the platform. As they’ve said before, there is always a queue of people waiting to buy. What happens if that queue dries up, however?

Since yesterday’s announcement the Second Lifeblogosphere has lit up with angry posts, the titles of many of which we won’t reproduce here due to crude language concerns. Many users are definitely angry.

Second Life users, and various Linden Lab staff are referring to this as ‘a revolution’, likening it to the original Second LifeTax Revolt in 2003, which was in a large part responsible for the formation of the modern Second Life economy as it stands today.

Between official and unoffical blog and forum responses, there have been several thousand negative reactions to the announced price rise so far. Operators of open-source Second Life alternative grids have enjoyed a surge of interest, and the open-source alternative ‘opensim’ (not to be confused with openspace/void simulators) has been getting more interest and more discussion among users than at any previous time.

On the Second Life public issue tracker, issue MISC-1776 is attracting comment-after-comment, and vote-after-vote protesting the price rises, at the rate of over a hundred an hour.

Rumors are already circulating that Linden Lab will capitulate rather than take a negative public relations hit over this issue, which is far from an unprecedented situation.

Linden Lab has yet to respond to any of the protests or protestors, and is not available to us for official comment.

10. Banning “Banks” in Second Life (2008)

The MIT Technology Review reported:

For months, as banking meltdowns in the virtual world Second Life cost participants steep losses of real money, corporate owner Linden Lab of San Francisco stuck to a laissez-faire line, essentially saying, We just host the software; residents should avoid deals that sound too good to be true. But this week, Linden Lab abruptly banned virtual banks that can’t furnish “proof of an applicable government registration statement or financial institution charter.” The requirement appears likely to shut down all of Second Life’s banks.

“There is no workable alternative,” Linden Lab wrote in an announcement posted Tuesday. “The so-called banks are not operated, overseen or insured by Linden Lab, nor can we predict which will fail or when. And Linden Lab isn’t, and can’t start acting as, a banking regulator.” The company wrote that “these ‘banks’ have brought unique and substantial risks to Second Life, and we feel it’s our duty to step in. Offering unsustainably high interest rates, they are in most cases doomed to collapse–leaving upset ‘depositors’ with nothing to show for their investments. As these activities grow, they become more likely to lead to destabilization of the virtual economy.”

The about-face came six days after Technology Review posted a story that described avatar losses and cited the possibility that one virtual-bank meltdown may have produced aggregate losses of some $700,000 in real money to many hundreds of Second Life “residents” in a manner that would be illegal in the real world. (See “The Fleecing of the Avatars.”) “I think the timing may well have been due to [that] story,” says Ben Duranske, an Idaho lawyer who has been closely following the complaints of Second Life participants.

Last year, some Second Life residents–subscribers whose digital alter egos, or avatars, populate the virtual world–deposited their virtual money, called Linden dollars, into a “bank” called Ginko Financial that had popped up in-world, promising high interest rates. Last summer, Ginko restricted withdrawals and eventually vanished. Since Linden dollars can be exchanged for real U.S. dollars, the losses were painfully real. (See “Money Troubles in Second Life.”) It is not clear who was behind the Ginko operation.

Linden Lab instituted an official policy on in-world banks, stating:

The Second Life Terms of Service prohibit offering interest or any direct return on investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter. This applies to inworld investment funds, stock offerings, and banking services and the like.

Linden Lab will remove any virtual ATMs or other objects that facilitate inworld “banking,” that is, that offer interest or a rate of return on Linden dollars invested or deposited. Those who continue to offer these services may be sanctioned with suspension, termination of accounts, and loss of land.

Usually, Linden Lab lets Residents decide how to act, live, or play in Second Life, but unregulated inworld “banks” brought substantial ecomonic risks to Second Life. Offering unsustainably high interest rates, they are in most cases doomed to collapse, leaving depositors with nothing to show for their investment.

This prohibition does not apply to companies that submit a registration statement, charter, or other applicable license from a governing regulatory authority; or those merely conducting marketing or education, but not accepting payments.

11. Zindra and the Forced Relocation of Adult Content (2009)

In June 2009, Linden Labs created a new continent called Zindra (originally named Ursula), which was intended to be the new, Adult-content mainland. Linden Lab forcibly relocated all the Adult businesses on the mainland to the new Adult continent, Zindra. This was seen by many as an attempt by Linden Lab to “tidy up” most of the mainland so that it would be more attractive to business users.

One blogger reported:

Taking aim at Congressmen, corporations, and a hypothetical flood of future users, Linden Lab announced today that it was planning to force a large chunk of its customer base in Second Life to relocate, creating an ‘adult-oriented’ continent and tagging its databases so that users can be better assured that they can toggle all that smutty adult-type stuff on and off based on how puritanical they feel. The move opens the door to the merger of the Teen Grid with Second Life, a move hinted at by Philip Rosedale on a recent episode of Metanomics, and to the kind of mass cultural and economic change that maybe only the anthropologists and accountants would love.

If you’ve been looking in on Second Life from the outside this might not seem like such a bad thing – you’ve been thinking of jumping on the idea of virtual meetings or training or teaching classes or whatever, but you keep reading about virtual divorce and the last thing you need is for your students or employees to get distracted by the pole dancers in the club that popped up next to your virtual campus or office.

Hey – Second Life will soon be “safe enough for kids”, so maybe it will be safe enough to come on in, or to take a second look in any case, last time you logged in was years ago and all you remember are spinning mall signs and virtual escort services.

For residents? Well, we’ll get to that. Regardless, the world of Second Life as you know it is about to change forever.

12. The Big June Layoff (2010)

When Philip Rosedale stepped down as CEO in 2008, he was followed by Mark Kingdon (known as M Linden). At the top of M’s priorities was getting Second Life out of the red. The cost-cutting move for which M is most remembered is the layoff of about 1/3 of Linden Lab staff in June of 2010 (which actually ended up being one of his last acts before stepping down as CEO).

The layoffs targeted most of Linden Lab’s highest-paid/longest-tenured staff, thus throwing out most staff who knew Second Life the best and had developed relationships within the Second Life community. (Source: a poster on SLUniverse)

Philip Rosedale was asked to re-assume the CEO role on an interim basis after M’s departure.

SL historian Marianne McCann adds:

On 9 June 2010, during the ramp up so SL8B, Linden Lab laid off 30% of their workforce, including a lot of community-focused Lindens. Within the same period of time, M Linden was let go the day he was supposed to give a big keynote at SL8B (Philip filled in at the last minute). A large memorial to the Lindens lost sprang up in the Rogue region, and many going away parties were held for Lindens lost.

13. Loss of Avatar Last Names (2010)

In 2010, Linden Lab decided to switch from the familiar and beloved first name-last name system to a new single-username system (every new user now had the same last name, Resident). Despite many protests over the years, it was not until 2018 that Linden Lab announced that they would bring back last names for avatars (but that there would be a U.S.-dollar charge for the service).

14. The Emerald Viewer (2010)

In September of 2010, Linden Lab announced that they were blocking users of the Emerald viewer from Second Life:

As of 10am PT Wednesday, September 8, the Emerald Viewer will be blocked from logging in to Second Life as a result of violations of our Policy on Third Party Viewers. Residents who have been using any version of the Emerald Viewer will need to use a different Viewer to access Second Life. You can download the official Second Life Viewer, developed by Linden Lab, here. Or you can learn more about alternative Viewers, developed by third parties, here. There are several new Viewers listed in the TPV Directory, so there are many alternatives available to you.

We take Residents’ privacy, safety, and security very seriously and will take action to enforce the policies that help protect it. As our CEO, Philip Rosedale, has blogged about, we recently removed the Emerald Viewer from our Third-Party Viewer Directory due to violations of our Policy on Third-Party Viewers.

Since then, we have been in communication with the Emerald development team and have requested several changes in order to remedy violations of our policy, including changes necessary to meet our privacy requirements, and to address GPL license violations. Unfortunately, the team was unable to comply within a stipulated time frame. As a result, we have decided to block logins from the Emerald Viewer in order to protect our Residents. All versions of the Emerald Viewer will be blocked from logging in to Second Life as of tomorrow at 10am. Please be aware that attempting to circumvent our blocking to access Second Life with a banned Viewer is a violation of the Policy on Third-Party Viewers and may result in the loss of one’s account.

According to the Second Life Fandom Wiki:

The Emerald Viewer (formerly Greenlife Emerald) is a third party viewer for Second Life, developed by Modular Systems. The project was owned by the avatar Fractured Crystal, who was banned for griefing on his former accounts in the past. The Emerald Viewer itself was used for a distributed denial of service attack against iheartanime.com in August 2010, leading Emerald owner Fractured Crystal to resign. The viewer was later blocked from Second Life on September 8th 2010.

15. RedZone (2010-2011)

RedZone was a Second Life IP address detection tool which used a scripting trick that exploited a hole created by audio and multimedia streamers, allowing the program to make the user’s computer access a certain website, thereby revealing their IP address. Some sim owners used it as a tool for identifying and banning potential griefers:

In an odd turn of events that is all too common online these days, an ingenious system created for Second Life land holders to reduce incidents of harassment and abuse by malicious griefers has itself turned out to be a potentially nefarious tool of harassment and abuse…

Once in possession of an avatar’s IP address, the program created a database of SL avatars associated with the same IP address.  By matching up the information, users could then create a list of banned avatars and prevent them from entering their territory.  This allowed landholders to exclude any malefactor, regardless of which avatar/identity the person was hiding behind. The incredible thing about this is thatit worked–but there was a catch.  The IP addresses that RedZone captured were not necessarily unique to the individual at the keyboard.  Because of dynamic IP address generators, such as those found in many wireless routers, among others, there were a lot of erroneous correlations of avatars and “alts” (alternative avatars created under one unique account).  Anyone who shared a server or router with other SL users would most likely have their accounts lumped together, creating all sorts of problems that goes well beyond the annoyance of spammers.

Concern about the RedZone product and its potential for abuse/misuse led to the creation of one of the most epic discussion threads in the entire history of SLUniverse.com, which you can read here and here (the first thread become so long that a second one had to be started!).

In 2011, blogger Tateru Nino reported that the man behind RedZone had been thrown in jail:

zFire Xue (AKA Michael Prime), creator and operator of RedZone, has been remanded to the custody of the US Marshals and is off for four months in prison. I bet you thought you’d heard the last of him already. This may very well be the last you hear of him. Prime entered a guilty plea for four counts of violating his probation following a prior conviction for fraud.

For the two years after his release, he’s not allowed to work anywhere where computers or computer programming are the primary business, not allowed near any online auction site, and not allowed to participate in Second Life, or any online virtual environment or online social network – at least, not without prior written approval from his assigned Probation Officer.

His computer will be monitored for files and activity during those two years, he can’t contribute to software projects, or write code for hire, and he’s not allowed to create or operate Web-sites. Also he gets to wear one of those nifty tracking devices as a part of the “Home Confinement Program.”

16. Merging the Teen Grid with the Main Grid (2010-2011)

In 2010, Philip Rosedale announced the closing of the separate Teen Grid in Second Life (source: Wikipedia). According to the Second Life Fandom Wiki:

The Teen Grid existed as a segregated area from the original Second Life world (Main Grid, which was initially restricted to persons aged 18+), from February the 13th 2005 to January 20th 2011.

Prior to the merger that saw both grids physically united as one, residents on Teen Grid were aged 13 to 17, and would be transferred to the Main Grid upon reaching their 18th Birthday.

Since the Grid merge, the age requirement to use Second Life has been lowered from 18 to 16. Individuals below this age limit who previously held accounts on the Teen Grid have had their inventories saved and all of their assets put on-hold until they meet the new requirements.

The rest of the former Teen Grid populous were given access to what was previously Main Grid (With the exception of “Adult” regions) and transferred alongside their assets.

Most of what had previously been Teen Grid mainland was retained (With the exception of Bannockburn and Midway Battlegrounds which were deleted, and the numerous Bay City regions which were moved to be alongside their Main Grid counterparts).

17. Cancelling Educational and Non-Profit Discounts (2011-2014)

Linden Lab ‘s 2011 decision to remove the nonprofit and educational discount, without any advance warning, was a particularly boneheaded move that forced many educational and non-profit institutions to suspend their sims, and the decision ultimately backfired on Linden Lab and cost them a key business market they couldn’t really afford to lose. (Some institutions moved to OpenSim in response.) Linden Lab finally re-established the discount three years later, but the damage was already done, and relatively few educational institutions have bothered to come back into Second Life.

18. DMCA Abuse in Second Life (2011-Present)

Some creators in Second Life have reported that they have been the target of false DMCA (Digital Millennium Copyright Act) claims, in an effort by some less-scrupulous vendors to get competitors to remove their items from the Marketplace, and tie them ups in paperwork and legal expenses. It is difficult to estimate what percentage of DMCA take-down requests are frivolous or vexatious, however.

19. Second Life Terms of Service Change (2013)

In August 2013, Linden Lab made a change to their Terms of Service (TOS) which caused an uproar among SL users. The wording that caused the consternation was this:

[Y]ou agree to grant to Linden Lab, the non-exclusive, unrestricted, unconditional, unlimited, worldwide, irrevocable, perpetual, and cost-free right and license to use, copy, record, distribute, reproduce, disclose, sell, re-sell, sublicense (through multiple levels), modify, display, publicly perform, transmit, publish, broadcast, translate, make derivative works of, and otherwise exploit in any manner whatsoever, all or any portion of your User Content (and derivative works thereof), for any purpose whatsoever in all formats…

It made it sound as though Linden Lab had absolute rights to take content uploaded by their resident/customers and do with as they please, forever. Understandably, this change upset many content creators. This also led to some external sites, such as CG Textures and Renderosity, forbidding the use of their textures within Second Life.

Linden Lab finally responded formally in 2014:

When we updated our Terms of Service in August 2013, the revised language of Section 2.3, the “Service Content License,” caused concern among certain Second Life creators. The revision to this section was worded in such a way that these creators expressed concern that we intended to appropriate their original creations and sell or license such creations without their permission. As our historical practice demonstrates and as we have since tried to clarify, this was absolutely not our intent. Creators are the lifeblood of Second Life. It is you who have populated Second Life with a petabyte worth of unique content and experiences, and it is important for our collective and continued success that you remain confident in continuing to create in our world. To be clear: Linden Lab respects the proprietary rights of Second Life’s content creators and prides itself in its success in providing platforms on which users can create original content and profit from their creations.

As part of an update to our Terms of Service today, we have made a modification to further clarify Section 2.3. The updated section still provides Linden Lab with the rights that we need in order to operate and promote Second Life, so you will see that we have retained much of the language as the previous version. However, the updated section now also includes limits that better match our intended meaning, and we hope will assuage some of the concerns we heard about the previous version.

First, the modified version limits our rights with respect to user-created content in Second Life by restricting our use “inworld or otherwise on the Service.” Additionally, it limits our right to “sell, re-sell or sublicense (through multiple levels)” your Second Life creations by requiring some affirmative action on your part in order for us to do so. This language mirrors the corresponding User Content License currently in Section 2.4, which has been part of the Terms of Service for years.

We know that the legal language of documents such as the Terms of Service can seem daunting, and we expect that some creators may continue to have concerns about particular elements of the updated agreement. Today’s revision to this section of the Terms of Service more closely expresses our intent – that we do not intend to appropriate or sell your content outside of our Service – and our hope is that the limitations clarified in the updated language of this section will support creators’ confidence in our platform.

20. Shutting Down the Third-Party Linden Dollar Exchanges (2013-2015)

Previous to 2013, there were a number of third-party Linden dollar exchanges, which bought and sold Linden dollars. In Spring 2013, Linden Lab announced an authorized reseller program, which allowed the third-party exchanges to sell Linden dollars to customers, but not buy them. In 2015, Linden Lab shut down all third-party exchange activity, forcing people to buy and sell Linden dollars using their LindeX exchange:

Hypergrid Business reported:

Linden Lab is shutting down third-party currency exchanges, CrossWorlds exchange owner Tony Bastianelli told Hypergrid Business today.

According to Bastianelli, he received an email today telling him that his reseller account will be shut down on August 1, and he will no longer be able to purchase Lindens on the LindeX, or resell them to Second Life users.

Third-party exchanges such as CrossWorlds, Podex, DXexchange, Eldex, AnsheX, ZoHa Islands, TeleDollar, Ruexchange, MoneyServers, FirstMeta Exchange, Coinek, Clip Market, Cash Services, Bulido, Affordable, Virtuatex, Viagame, Exchange4SL, vForEX, and Virwox have been allowed since spring 2013 as part of the Linden dollar authorized reseller program, but were only allowed to sell Linden dollars to customers, not buy them. Previously, exchanges were able to both buy and sell Lindens.

Many of these exchanges were based overseas, and made it more convenient and less expensive for international users of Second Life to buy the grid’s virtual currency.

Bastianelli said that he will close down CrossWorlds on June 30, since that is the end of the company’s tax year.

“There is nothing else to do,” he said. “Linden Lab has left all exchanges with no options.”


So, have I forgotten anything? Please let me know in the comments, thank you!

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