Due to severe financial losses caused by Celsius’ bankruptcy and FTX’s debacle, the cryptocurrency platform Midas Investments disabled deposits and swaps.
CEO Iakov Levin stated that the organization’s goal for next year is to focus on a new project that will be “fully transparent” and provide a “improved investment experience.”
Midas Investments’ Founder and CEO stated in a recent blog post that the company shut down services on its platform yesterday (December 27). It temporarily disabled customer withdrawals in order to perform necessary calculations, and then allowed users to withdraw their remaining funds with adjusted deductions.
“We will adjust user balances by balancing remaining liabilities in BTC, ETH, and stablecoins with remaining assets, deducting 55%, and rewards earned,” Levin explained.
Other digital currency balances, such as BNB, AVAX, and FTM, will be unaffected. In addition, MIDAS tokens will be distributed as compensation to affected customers based on the amount deducted.
Levin anticipates that retail and institutional clients’ interest in Decentralized Finance (DeFi) will grow significantly over the next five years. As a result, Midas Investments plans to offer “scalable, on-chain, verifiable, tokenized CeDeFi strategies” to CeFi and DeFi users.
The company also intends to launch a new project “based on full transparency principles” with its own native token. The company will eventually discontinue providing liquidity for the MIDAS token and exchange it for the new asset.
The CEO expressed regret to all customers who had been harmed by the platform’s closure. He expressed confidence that the proposed amendments would be the best solution to the current problems:
“This isn’t the end, but rather the start of something new. I understand how difficult it was to close Midas and sincerely apologize to anyone who lost money. I will do everything in my power to ensure that you can recoup your losses in the new project.”
Levin stated that the company lost approximately $50 million (20% of its $250 million AUM) this spring, and that users withdrew a large portion of their holdings following the collapse of former crypto giants Celsius and FTX. Midas Investments attempted fundraising and other options to deal with the crisis, but none were successful: “Despite these efforts, the extensive withdrawals due to Celcius and FTX’s insolvency, combined with reduced yield opportunities on the market, made it impossible for us to cover daily payouts to users due to the assets deficit.”
The FTX debacle triggered a massive domino effect, negatively impacting the operations of numerous businesses. Withdrawals were suspended by the Japanese cryptocurrency platform Liquid Global and the cryptocurrency lender Genesis Global Capital, while BlockFi went even further, filing for bankruptcy.
Big financial players like BlackRock, Temasek, Tiger Global Management, Galois Capital, and others lost millions by investing in FTX.
