Following the recent issue on the collapse of Three Arrows Capital (3AC), crypto yield app Finblox—which also received investments from 3AC— announced that they will impose its first monthly withdrawal limit of $1,500 to manage the impact of 3AC on its liquidity. In line with this, Finblox also put their staking rewards distribution on hold.
According to recent on-chain data that triggered the speculation around the possible collapse of 3AC, the hedge fund may crumble and is currently facing potential insolvency after a $400 million liquidation. On June 18, 2022, 3AC confirmed that they had suffered heavy losses because of the current crypto market crash and, more importantly, the collapse of Terra and Luna.
As per the statement shared on Twitter, Finblox has decided on these changes as it evaluates the impact of 3AC’s reported issues.
To our Valued Users,
We have been closely monitoring market conditions and numerous media reports regarding a prominent institutional borrower, Three Arrows Capital (3AC) – who is also an investor in Finblox.
We have been cooperating with over 8 partners and protocols, including 3AC, to generate yields and spread the risk as evenly as possible. Based on currently available information and our priority to maintain the integrity of the platform – we have decided to take the following actions while pursuing all available options to evaluate the effect of 3AC on the liquidity, and ensure fair treatment of all user assets in the system:
- Pause reward distributions on the Finblox platform for all users
- Charge withdrawal limits (500 USD equivalent per day, up to a maximum of 1500 USD equivalent per month) for all levels of users
- Delay referral program and deposit rewards
- Disable creation of crypto addresses for newly registered users
This set of actions is a necessary move in such a highly volatile market and we believe should help us and our community manage the effect.
Ultimately, Finblox will do everything in its power to protect our users’ funds and reinstate our services in full. We will provide you with updates and inform you of any new developments as soon as possible, and do all that we can to avoid further impact on our users.
Thank you for your understanding.
The Finblox Team
The firm assured that they will do everything in their power to “protect users’ funds and reinstate our services in full.”
Further, Finblox’s website guaranteed its users’ “peace of mind with $45M insurance on assets.”
Recently, Celsius, also a yield and savings crypto app, has halted withdrawals, swaps and transfers between accounts, citing “extreme market conditions.” (Read more: CryptoCrash: ETH, YFI, KP3R. DeFi Coins Down by 90% as Bear Market Humbles Everyone)
On Finblox’s Telegram channel, a team member said the company is actively brainstorming different ways to compensate users. One user suggested the team should honor all existing withdrawals prior to the announcement.
Another team member said they are hoping to have more information available to share with everyone soon and also noted the positive support Finblox has received from its community.
On Twitter, some users expressed disappointment in the news.
Twitter user CryptoSteveWand called out the 90% APR that Finblox is offering to be unsustainable. (Note: Finblox only offers 90% APR for AXS (Axie Infinity Shards), but for other coins, the APRs are relatively the same as the competition. So the 90% APR as the reason for the collapse could be incorrect. See the image below.)
Twitter user 0xTim.eth has called out all lending platforms to not give vague statements so users know exactly how risky things are.
Last March, Finblox raised $3.9m in a strategic seed round to democratize wealth building through cryptocurrency. (Read more: Finblox Closes Strategic $3.9M Seed Round to Democratize Wealth Building Through Crypto)
Finblox also counts Sequoia, Coinfund, and Dragonfly Capital as investors.
This article is published on BitPinas: Finblox Imposes $1.5K Monthly Withdrawal Limit Amid 3AC’s Uncertainty
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.