Midas, a custodial investment company, will shut down its activities due to a shortfall of up to $63.3M in its DeFi portfolio. Iakov Levin (the CEO and founder of Midas), who is also famous by the name “Trevor,” stated noted that the move is taken partly due to a loss of up to $50M in the DeFi portfolio. This equals twenty percent of its cumulative $250M assets under management (AUM).
Midas Investments Announces a Closure amid a Shortfall of $63M in DeFi Portfolio
Apart from that, Levin additionally pointed out that the crashes of Celsius, FTX, and Terra all played a significant role in harming the position of Midas. The customers extracted nearly sixty percent of the funds following the respective downfalls. Levin noted that the platform went through a huge asset outflow of above sixty percent during the recent six months. As per the executive, the FTX, Celsius, and LUNA had collapsed during that time.
The executive added that it became very hard for them to maintain the fixed profit model of the company. In the declaration, it was mentioned that the cumulative liabilities of the firm in stablecoins, Ether, and Bitcoin equal nearly $115M whereas $51.7M is the worth of their present assets. This causes a deficit of almost $63.3 million.
As per a blog post, the platform lost more than $14 million occurred in the Ichi protocol. Besides this, Midas also lost another $15 million because the DeFi Alpha portfolio’s status experienced a huge devaluation simultaneously. The founder additionally disclosed that the platform is making a strategy to consequently provide CeDeFi strategies to the consumers dealing with decentralized finance (DeFi) and centralized finance (CeFi) with its latest project.
According to the executive, the respective project will offer several unique benefits. Levin asserted that it will link the struggling protocols via liquidity. The executive clarified that the vision for creating the latest project revolves around combining the promising elements of both forms of finance including decentralized and centralized. Nonetheless, additionally, centralized decision-making would be atop.
DeFi Victims of Crypto Winter Increase in Number
In the meantime, following the recent disclosure of its strategy for refunding the consumers, Defrost Finance (a DeFi company) eventually opened up over the allegations dealing with a likely “rug pull” following the latest exploit of up to $12 million. The platform was of the view that if a developer key gets compromised that does not mean that a rug pull has taken place.
In addition to this, Avraham Eisenberg (the exploiter of Mango Markets) was recently detained and accused. On the 27th of December, a complaint was released by the Federal Bureau of Investigation. In the respective complaint, Eisenberg was accused of commodities manipulation and commodities fraud.
Midas Investments is considered the new most dramatic victim during the year 2022. Aside from that, the tsunami initially took place when TerraUSD (UST) – a well-known stablecoin project – plunged after a huge sell-off. As a consequence of that, a great amount of nearly $500B was wiped out just in a couple of weeks.
After that, the prominent players in the market crashed in response to this enormous jolt, taking into account Celsius Network, Voyager Digital, and Three Arrows Capital. Three Arrows Capital utilized the funds borrowed from the other entities to carry out risky gambling on the crypto markets, supposing that prices would keep on rising. Voyager was one of its creditors having given it a loan of $650 million.