FTX contagion continues: Midas Investments shut down

Cryptocurrency platform Midas Investments has suspended deposits and swaps due to the huge financial losses caused by the bankruptcy of Celsius and the failure of FTX.

Chief Executive Iakov Levin said the organization will aim to focus on a new project next year that will be “fully transparent” and offer an “enhanced investment experience.”

Another victim

In a recent blog post, the founder and CEO of Midas Investments said that the company suspended services on its platform yesterday (December 27). It held back customer withdrawals for a few hours to make the necessary calculations and later allowed users to withdraw their remaining funds with adjusted deductions.

Levine revealed that the entity’s original goal was to charge 48% of customer balances, but he later changed the number to 55%:

“We will adjust user balances by balancing remaining liabilities in BTC, ETH and stablecoins with remaining assets, 55% discount and rewards earned.”

Other cryptocurrency balances, including BNB, AVAX, and FTM, will not be affected. The company will also distribute MIDAS tokens as compensation to affected customers based on the amount deducted.

Levin believes that retail and institutional customers will significantly increase their interest in decentralized finance (DeFi) over the next five years. As such, Midas Investments intends to launch “scalable, on-chain, verifiable, and tokenized CeDeFi strategies” for CeFi and DeFi users.

The company also aims to introduce a new project “built on the principles of complete transparency” which will have its own original code. The company will eventually stop providing liquidity to the Midas token and replace it with the new asset.

The CEO apologized to all customers who were affected by the platform’s closure. He hoped that the planned changes would be the best solution to the current problems:

“This is not the end, but the beginning of something new. I understand the difficult decision to close Midas and apologize to anyone who has lost money. I will do everything I can to make sure that you can make up for your losses in the new venture.”

What is causing the problem?

Levine said the company lost about $50 million (20% of $250 million) this spring, with users withdrawing much of their holdings after the collapse of the previous crypto giant. Celsius And the FTX. Midas Investments sought fundraising and other options to deal with the crisis, but none succeeded in stemming the decline:

“Despite these efforts, massive withdrawals due to the bankruptcies of Celcius and FTX, coupled with low return opportunities in the market, made it impossible for us to cover the daily payments of users due to the lack of assets.”

The FTX fiasco created a massive domino effect that negatively affected the operations of many companies. Japanese crypto platform Liquid Global and cryptocurrency lender Genesis Global Capital Withdrawals cancelled, while BlockFi He went ahead and filed for bankruptcy protection.

Major players in the financial world such as Black stoneTemasek, Tiger Global Management, Galois Capital, and others have lost millions due to investments in FTX.

The post FTX Infection Continues: Closing Midas Investments appeared first on CryptoPotato.

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