Midas Investment platform is closing down

Custodial investment firm Midas has announced the closure of its platform due to the $63.3 million balance sheet hole created by the collapses of Celsius and FTX.

Iakov Trevor, the CEO of Midas Investment, the platform that previously enabled users to deposit funds and invest in various decentralized finance projects, said in a blog post that the company’s balance sheet shows $51.7 million in assets versus $115 million in liabilities. The company’s position was not previously disclosed even to employees.

Trevor links the company’s closure not only to the collapses of the aforementioned companies but also to the strategy the company initially adopted to achieve the highest annual percentage returns among its competitors in 2021. But by the first quarter, Midas realized it couldn’t keep up with returns, and the company cut rates in February.

The CEO added:

Meanwhile, in Spring the crypto and DeFi markets faced challenges, and our investment portfolio suffered cumulative losses of 20% or approximately 50 million dollars. 

14 million dollars were lost in Ichi protocol, and 15 million dollars due to DeFi Alpha portfolio position’s value decreasing. 

We also experienced an outflow of assets of more than 60% over the course of six months due to events involving LUNA, Celsius, and FTX. This made it impossible for us to sustain our fixed yield model.

Today, Midas Investment has closed the platform. Users can withdraw their funds, but the assets saved in their accounts, such as bitcoin, ether, or stablecoins, have been cut by 55%. No rewards will be distributed either:

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

Balances in other assets, such as BNB, AVAX, FTM, and CeDeFi, will not be impacted aside from the reduction of historical earnings.

At the time of writing, Midas’ native token, MIDAS, is down 99.94%, worth $0.01574:

Based on how much we deduct from your balance, we will give MIDAS tokens as compensation based on the price of the announcement date (12.27.22). MIDAS tokens will be swapped to the token’s of the new project.

The new project token has not been declared yet. Midas said the new project would be CeDeFi, whatever that means.

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. Holders of the Midas token will receive a share of the revenue from the protocol being created, as well as upside from the platform’s growth and market cap increase.