Please do not use Virwox for trading newC$.
Several of our customers reported that Virwox is taking money from our customers and not delivering the corresponding amount of newC$ to their Avination Accounts.
Those of you who have paid Virwox to aquire Avination currency and have not received it, will need to contact VirWox to demand reimbursement.
It has further come to our attention that Virwox buys C$ at extortionate rates. We do not condone such blatantly profiteering behaviour and strongly discourage selling C$ to Virwox at these rates.
We are very sorry for this inconvenience.
Avination also lowered the minimum cashout limit from 4000 C$ to 2000 C$. The minimum avatar age for cashouts has been lowered to 2 days. Cashouts will typically take only hours if there is no suspicion of fraudulent activities.
We have been asked by our residents, if or when Avination would accept Bitcoin. Our developers have been working hard and we’re happy to announce we are now able to accept Bitcoin for Sim payments as well as to buy inworld currency.
We also are offering the usage of old C$ for paying your Sim tier now. More options to use old C$ for services will follow, while we’re also continuing to convert old C$ into new C$.
What has happened
From April 14th, Avination has been introducing a new currency balance, New C$, into the world. Originally this was planned to be done at a much more sedate pace, however, some cases where the new system has been abused and where residents have advised us of the potential for abuse caused us to have to move up the schedule without being fully prepared.
Especially, we have not had the opportunity to prepare and provide explanations and perspectives for our residents. This post is intended to fully explain the reasons and allay any fears anyone may have.
Why did it happen
When Avination started in 2009, the decision was made to create a virtual currency, the C$, and to bank and keep all real money paid in for cashing out again. This worked well until the summer of 2011.
In 2011, a large number of credit card numbers, which had been skimmed in the USA, were sent to a group of money launderers based in Saudi Arabia. From internet cafes in Saudi Arabia the group started to buy C$. Over a period of three months, $126000 were paid in using these stolen credit cards.
For those in Europe, a bit of explanation: In the US, the summer holidays are from the beginning of July until the end of August. During that time people go on vacation, children are sent to camps and people generally live the good life. Many don’t check their statements during that time.
Beginning at the end of september, credit card charge backs started coming in. With the fees and interest that accrued on these fraudulent transactions, the entire amount was reclaimed by the banks and we were even left owing $14000.
Maybe, in hindsight, it would have been wiser to reset the C$ then and explain the situation, but we were confident that Avination’s growth would continue and also we could not speak about certain aspects of the fraud case because it was an ongoing investigation.
Therefore, the decision was made to float the C$. Floating in this case means to give the buy and sell rates over to market forces and pay day to day cash outs from the money that was used to cash in. By adjusting the rates occasionally we were able to make this work quite well. There was a tight spot in the summer of 2012 but our residents banded together and we weathered the crisis. I did have to sell our family car and put the money into cash outs but I was happy to be able to help.
The money launderers were apprehended in 2013, partially based on information we were able to provide to the authorities. However, that had no impact on the financial outcome.
In 2013 we were hit by more fraud, it was comparatively low level but wiped out any reserves we had managed to build up. The ripple effect from this caused the exchange to “run dry” at the start of March.
That had been foreseen and there was an elaborate plan made to address this issue. Work was driven forward on the new website because it was required to put the plan in effect.
What went wrong
Unfortunately, the new system was open to ways of abuse that we hadn’t foreseen, mainly because we weren’t aware of the function of many resident-created scripted objects. These, used in a certain way, were able to effectively steal the New C$ from the owners’ accounts.
In an emergency response, we zeroed some Old C$ balances and rolled out a software version that effectively confined the Old C$ to the website. At this time, some residents have their Old C$ balances displayed on the website while for others it is zero.
With us being too busy with the technical aspects of this much accelerated and forced implementation of the planned changes, we have regrettable been unable to communicate as well as would have been desirable. I have taken the time to explain all this so some people in world, but have only now found the time to write this. We apologize for the anxiety this may have caused.
We understand that the current situation is unworkable and will begin implementing the final phase of the plan, in the course of this, changes we made to combat fraud and abuse in the past few days will be rolled back.
The Old C$ balances that were cleared from the accounts will be returned, unless they were the result of fraudulent transactions. We expect that very few regular residents will be affected by any of those transaction. It will take a bit of work to put them back, so this will not happen immediately but over the course of the next week or so.
Once that is done, the Old C$ that were put into credit processing will also be returned.
The New C$ exchange is working the way the system was originally planned and it is safe to use as there is backing for the New C$. Cash out limits are 1 Million New C$ per week for the moment and can be raised when needed.
In order to take care of the Old C$, the exchange “spread”, the difference between buy and sell rates, was increased by 10 points. The overage that is created by the exchange, after fees for the various payment providers are deducted, will be split down the middle. Fifty percent will go towards building a fund that can be used to mitigate the effect of the low levels of fraud that may still happen from time to time. The other fifty percent will be applied toward converting Old C$ to new C$. Depending on the amounts, conversion could be monthly, weekly or even daily. The more the New C$ gets used, the more Old C$ we can convert to new.
Finally, we are working on integrating Bitcoin and are in talks with Neteller, who are keen to work with us. We will also be adding more countries for secure bank transfers.
Update #1: SO far, over 2.2 Million Old C$ have been restored to 129 accounts. Work continues to restore more accounts.
Update #2: We have restored 2.5 Million Old C$ which had been stuck in cash-out requests to the accounts of the owners.
An unfortunate combination of software versions on our new login server cluster has caused them to fail several times per day.
While we have been doing our best to stay on top of restarting them, this is the time where we are going to fix them for good. We expect this to take about 30-45 minutes and will repoen logins as soon as possible.
We’re sorry for the inconvenience and are working hard to be back soon.
UPDATE #1: We have one server updated and people have been able to log in. Still problems due to one server still being offline.
RESOLVED: Logins are fully back again. We’re sorry for the inconvenience. Enjoy your stay in Avination.
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.
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 ™ is in violation of the TOS.
Avination Management has attempted to discuss this matter with Linden Labs by reiterating the importance of this option as well as trying to understand how this is a violation of TOS, but unfortunately these talks have since broken down.
Linden Labs’ Lawyers are adamant that these TOS clearly state that Linden Dollars cannot be transferred. This stance will not just affect us as at Avination but could also see far reaching consequences for other companies considering legal use of L$, including services like Shoutcast Stream Rentals and other services rendered outside of SecondLife.
Unfortunately, for our loyal users and us this means an end to offering a fast and convenient way of exchanging Linden Dollars to C$.
According to Linden Labs, users of SecondLife must cash out through LindeX before using the real currency to pay for services not rendered within SL.
We are sorry for the inconvenience this will cause you and please accept we have tried everything in our power to reach an amicable solution with Linden Labs.
After the recent hardware issues at our datacenter have been solved, we’re back again. We apologise for the inconvenience caused by those disruptions to our service and your favourite grid.
Please enjoy your evening at Avination.