In the words of Iakov Levin, CEO of Midas Investments, “Based on this situation and current CeFi market conditions, we have reached the difficult decision to close the platform.”
Midas Investments announced its plans to shut down its platform after incurring significant losses that have led to a large asset deficit for the firm.
In its blog post, Midas highlighted that the firm has suffered cumulative losses of $50M since Spring 2022. It added that users withdrew over 60% of the firm’s assets under management (AUM) in the aftermath of Celsius and FTX’s collapse.
According to Midas Investments, the asset deficit in its portfolio has made it impossible for the platform to issue daily payouts to its clients.
As a result, Midas will disable deposits and token swap services starting December 27. It will also temporarily disable withdrawals for a few hours to make balance adjustments.
Midas plans to balance liabilities by deducting 55% of user assets held in Bitcoin (BTC), Ethereum (ETH), and stablecoins. The crypto investment firm will compensate clients by crediting Midas tokens (MIDAS) to their accounts. Meanwhile, the balances held in Binance Coin (BNB), Avalanche (AVAX), and Fantom (FTM) will only be affected via reductions in historical earnings.
Going forward, Midas Investments will release a new product to provide “tokenized CeDeFi” opportunities to its clients. This product will include provisions for offering interest in Bitcoin, Ethereum, and stablecoins. Midas will also provide yield market indexes besides leveraged short and long assets.
“The new project’s business model will involve a revenue share of ETH transferred to the Midas token. The team aims to reach a market cap of $200 million within two years.”
Following the announcement, the Midas token saw a significant drop in its price. It is currently valued at $0.01046, down by 99.96% in the last 24 hours.
