Midas Investments said Tuesday that it would shut down operations because of the massive losses it incurred since the start of the crypto winter. The investment firm has a deficit of around $63 million in its decentralised finance (DeFi) portfolio.

High Outflow of Assets From Midas Investments

Announcing the closure today, the company’s CEO, Iakov Levin, also known as Trevor, stated that the firm suffered a significant loss of $50 million in 2022, representing 20% of its $250 million in assets under management.

Trevor also disclosed that the significant loss was further compounded by the recent collapse of centralised lenders such as Celsius and Sam Bankman-Fried’s crypto empire FTX, resulting in an outflow of assets from Midas of more than 60%.

In addition, the company suffered DeFi-related security breaches and overpaid interest in its native MIDAS token, leading to a further loss of $58.5 million.

“In the spring of 2022, Midas DeFi portfolio suffered a cumulative loss of 50 million dollars (20% of $250 million AUM). After Celsius and FTX events, the platform experienced over 60% of AUM being withdrawn, creating a large asset deficit. Based on this situation and current CeFi market conditions, we have reached the difficult decision to close the platform,” the CEO said.

Midas owes $115 million in liabilities but only holds $51.7 million in Bitcoin (BTC), Ethereum (ETH), and stablecoins, resulting in a deficit of approximately $63.3 million. The company has stated that the funds will now be used to reimburse customers.

CeDeFi strategies for CeFi and DeFi users

While the investment company has decided to shut down, Trevor disclosed that Midas is planning to explore other opportunities in the crypto industry.

The CEO revealed that the firm intends to offer CeDeFi strategies for CeFi and DeFi users, creating a new project in hopes of creating a new “win-win situation.” He further noted that the plans, if executed, will connect competing protocols through liquidity.

Meanwhile, Midas Investments is one of the many crypto companies that have recently exited the market due to the intensified storm.

Last month, Japanese social media empire LINE Corporation announced its crypto exchange division BITFRONT closed down operations citing unsettling market conditions.

Like Midas, the company is not abandoning the industry entirely. The exchange said the exit would allow it to focus on the LINE blockchain, another arm of the LINE Corporation, to enhance its development and growth.

(By William A. Frederick)