Crypto investment firm Midas is shutting down its DeFi platform after suffering irrevocable losses in the Terra, Celsius, and FTX crashes.
$63M Deficit Forces Midas Shutdown
In the aftermath of the heavy losses incurred in the series of crashes in the industry this year, Midas Investments is closing down its DeFi-based yields platform. The news broke when Midas CEO and founder Iakov “Trevor” Levin wrote and published a blog announcing the news on Tuesday, claiming a deficit of $63 million.
Levin wrote,
“I’m Trevor, the CEO of Midas Investments, and I am writing to you today with a heavy heart to announce that the Midas platform is closing down. Based on this situation and current CeFi market conditions, we have reached the difficult decision to close the platform.”
The blog also detailed the heavy losses suffered by the platform in 2022, as Levin claimed that the Midas platform suffered a cumulative loss of $50 million. According to the founder, the platform needs to be shut down since the respective crashes of the Celsius and FTX ecosystems wiped out over 60% of all assets under the management of the Midas portfolio and created a significant asset deficit.
CeDeFi Shows Way Forward
Furthermore, Levin also outlined the way forward for Midas, claiming that the company will be focusing on its CeDeFi or centralized decentralized finance initiatives in order to create fully transparent, on-chain investment options
He wrote,
“Over the past eight months, our team has been focused on identifying and capitalizing on opportunities to balance our assets and liabilities. This included launching CeDeFi strategies, seeking fundraising, and exploring opportunities with DeFi protocols. Despite these efforts, the extensive withdrawals due to the insolvency of Celcius and FTX, coupled with reduced yield opportunities on the market, made it impossible for us to cover daily payouts to users due to the assets deficit.”
Balance Adjustments With MIDAS Tokens
The company has already started its process of shutting down the DeFi platform. On Tuesday, all deposits, swaps, and withdrawals were disabled. The team is working on calculating and adjusting account balances by deducting 55% from user balances held in BTC, ETH, and stablecoins. The remaining amount will be compensated with MIDAS tokens that users will be able to exchange for the new tokens of the upcoming project.
Levin wrote,
“The goal of the new project is to create a win-win situation by connecting competing protocols with liquidity and offering a simplified yield to a range of DeFi and CeFi audiences.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.