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By Arbitrage Wise, CEO
JT Financial
I am sure that many of you are now aware of Linden Lab’s new policy regarding banks, particularly the banning of any unchartered banks paying interest effective January 22. Upon the release of this new policy, many of our 10,000 plus customers attempted to withdraw all of their funds, thus crashing our server. We have been able to get the server under control, but I have decided that it is better to leave the server off for 24 hours to help ease the tension and bank run caused by the mass panic, as well as allow everyone time to calm down and give me a chance to assure everyone that their money is safe. Throughout all of the problems we that faced last year, we were able to remain firm with our 100,000L daily withdrawal limit, and it saddens me that we cannot hold firm to that limit with this new problem we are now confronted with. However, we currently only have about 7Mil in reserve for withdrawals, and I do not feel that it is close to being sufficient to cover the run that we’ll experience once we open up our ATMs. In light of that, I will try my best to assure everyone that we plan on staying here for the long run, and will cover ALL of our obligations to our customers.
If you are not aware of how we are able to pay the interest that is owed, we have already disclosed that in a previous release here on SLR. We currently have approximately $170,000 USD in various accounts earning approximately $1000 a day. This is just the profits that we are earning from running the program in-house, and does not include the potential profits that can be made once we release the software publicly. If all of our SL businesses do fail from this new policy, we are confident that by May, we will be able to generate enough profits to cover all deposits and interest owed up to that date. The initial plans are as follow. Please keep in mind that we must remain flexible to accommodate for any unforeseen circumstances. 1) We plan on bringing the ATMs back up tomorrow around 12pm SLT with a lower withdrawal limit, and will post a group notice in the group JT Financial. My first guess would be to set the withdrawal limits at 5000L or 10,000L. I know it’s a pathetic amount, but right now, we have to work with what we have. The last thing we want to do is to succumb to the mass panic and lose focus on our long term plans. 2) We will continue to pay interest on all deposits up to Jan. 22, and will disable interest payments after that date unless we can negotiate something with LL. 3) We will continue our RL trading, and post a weekly report on SLReports.net starting tomorrow with profits and overall assets as a way to assure our customers that we are still profitable. 4) We will slowly move some excess cashflow back into SL, and will increase withdrawal limits as things become more stable. However, we will not liquidate any cashflow that would hurt our trading or profits. 5) We will negotiate with large investors or anyone willing to commit long-term to continue paying interest in real life in order to build leverage to support the withdrawals. 6) Once we see that withdrawals have slowed down, and have built up at least a 10M reserve in SL, we will raise the withdrawal limits back up to 100,000L per day.
This plan does not accommodate for the SL Capital Exchange since we are unclear if LL’s new policy applies to it. We will be contacting LL to get some clarifications as to how this will affect Capex, and will make the necessary changes to accommodate the policy. We will also redevelop our Affiliate system to ensure that all affiliates hosting our ATMs will receive some form of compensation in some manner or form. Aside from the plans that have been laid out, the best thing that we can do is for all to remain calm, and trust that we will pay everyone back what is owed to them. JT Financial has a spotless record with no customers every losing a single cent with us, and I plan to keep it that way. However, I cannot do so without your help. All I ask is that you remain calm, do not fuel the bank run by only withdrawing what you need, and trust that you will get your money back.
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