J.P. Morgan analyst: “while the news of the collapse of FTX is empowering crypto skeptics, we would point out that all of the recent collapses in the crypto ecosystem have been from centralized players and not from decentralized protocols."

Can I be the first to mention that J.P. Morgan, according to Forbes on October 18, 2022 had just invested into Second Life's "Tilia" which handled Second Life's $650 Million virtual economy in-game and on/off fiat ramps. Linden Labs spun it off ad J.P. jumped in to invest in it. If you're wondering why they are a month ahead of this FTX collapse, it's because Tilia was part of the 50 state licensed and legal on-ramping and off-ramping of USD into the "Virtual World" we've heard so much poking fun over lately with Meta's Horizon Worlds etc.

In other words, J.P. Morgan put financing into a stake of a spun-off code that was already in use by Linden Lab's in Second Life and they will probably make "metaverse and Web3 gaming with crypto tokens" the preferred way to on and off ramp for whatever you want in the game whether that "game" has MATIC or WBTC in it or MANA or whatever but you can always dApp those in and out as well with your own locally held keys without ever entering a walled garden that can "Freeze" your withdrawals just because someone cheated and someone else broke down in the chain somewhere. Hence = contagion.

Cheating isn't possible in these worlds. They see if the person providing the tokens or crypto have what you request, and you send payment only once an automated contract (sort of like Atomic Transactions) says for some period of time the order is good to go on both sides (Transek is like this too).

Linden Lab announced the spin off of its proprietary finance engine Tilia this morning. Tilia’s solution, built for game, virtual world and mobile application developers handles payment processing, in-game transactions, as well as payouts to creators by converting in-world tokens to fiat currency including USD serving as the backbone of any functioning virtual economy.

Tilia has been running Second Life’s $650 million dollar economy for the past seven years. Financing for the new company is coming from their strategic partner, JP Morgan. “It's very important virtual worlds have the instantaneous settlement Tilia provides,” said Brad Oberwager, Executive Chairman of Tilia, and acting CEO of Linden Lab. “We can handle very high transaction volume at very low dollar amount that even with USDC, the systems aren't built for that kind of stuff. We move one 250th of a dollar sometimes.”

In addition to the investment, Tilia is also working with J.P. Morgan Payments to increase payout methods and expand the number of pay-out currencies. Perhaps most importantly, partnering with the world’s largest bank will enable Tilia to scale to the potential size of the putative Metaverse. Drew Soinski, Senior Payments Executive, Managing Director, J.P. Morgan Payments, will join Tilia’s board.

Some of the above quotes come from the Forbes article. This is a proprietary part of the Second Life game and nothing else until the J.P. Morgan investment and the announcement it would be working to add more options to its off-ramp with J.P. The odd part is Tilia (which is in Second Life - a metaverse or just a game to some) comes with a Money Transmitter License in the United States and is compliant internationally to make fiat payments nearly everywhere...

One of the most interesting things about Tilia is that it’s registered as a money transmitter and its user accounts are compliant with state, federal and international regulations. Importantly, Tilia is the only token based virtual payment system that easily and securely converts in-game tokens into fiat currency, wherever the user resides. The partnership with JP Morgan assures a payout in fiat currency pretty much anywhere credit cards work.

I have to do more digging, but I believe what JP is after is the sales of proprietary, but non-custodial and US licensed, compliant software that they get a nice flow of profit from as this is literally why the FTX thing was set up in the first place - to scare you - or aware you - of the importance of fiat gateways/fiat exits that are based on code and not capable of stealing/"trading"/"donating" your money as SBF has. To me, everything is a game. So seeing this type of setup isn't exactly surprising nor am I upset.

Everyone missed this because in October we were just bumbling along with the usual headlines. The US elections. Probably explains why the twitter handle for "Tilia Pay" only had 450 followers when I checked them out this week. Remember Forbes gave SBF his "net worth" $25.6 Bn in January. Apparently that's good enough for the smartest VC's and investment bankers in the world to hand over money. Some even had pages up praising their altruism that only came down around the collapse itself - when they wrote their investment down to zero. Don't worry, I arweave'd it into my ardrive so you can always see it. Just like I do with my long reddit posts. They always get deleted too.

Or perhaps it was just a game after all.