Midas Investment has been forced to close down due to the severe liquidity pressures caused by the bear market and several crypto firms’ fiasco. Midas’ founder hopes that this move is not the end, but rather the beginning of something new for the crypto firm.
Midas Investments Shuts Down With $63M Deficit
Another company has fallen victim to the cryptocurrency bear market, Midas Investments, a custodial centralized, decentralized finance (CeDeFi) investment platform based in Switzerland has closed down its platform.
In a blog post, Midas founder and CEO Iakov Levin, also known as “Trevor,” explained that the move is because the fund’s DeFi portfolio lost $50 million which is 20% of its $250 million assets under management (AUM). Following the events of Terra, Celsius, and FTX, the platform experienced a large percentage of its AUM being withdrawn, creating a large asset deficit.
The company’s total liabilities in Bitcoin, Ether, and stablecoins are $115 million, while its assets are worth $51.7 million thus leaving a deficit of $63.3 million. It further breaks down that Midas lost $58.5 million to DeFi-related security breaches and overpaid interest in its native MIDAS token. The deficit was discussed further in the YouTube video.
What’s Ahead for Midas Investments?
Midas disabled customer withdrawals for a few hours while it did some calculations and later allowed users to withdraw their remaining funds with adjusted deductions. Trevor revealed that the entity had initially wanted to deduct 48% from clients’ balances, but later changed the figure to 55%.
According to Trevor, Midas is planning to explore other opportunities in the crypto industry. Midas plans to introduce a scalable, on-chain, verifiable, tokenized CeDeFi strategy for both CeFi and DeFi users. Midas also plans to propose yield market indexes and leveraged long and short assets through collateral positions.
Moreover, Midas discusses its plans for the first four months of 2023, which will include market research and prototyping for DeFi and CeDeFi business models, plans to swap its current token for a new one, and more.
The market downturn took out some of the industry’s previously sturdiest firms, including hedge fund Three Arrows Capital, Voyager Digital, and Celcius Network. Also, the digital asset lender BlockFi and crypto exchange FTX recently collapsed this year.