Celsius Network and Finblox have become troubled platforms. Are other platforms safe?

Consolidating releases from various platforms

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Table of Contents

Troubled platforms

Celsius Network Pauses Withdrawals, Swaps, and Transfers

(13 June 2022) Initial announcement:

On 13 Jun 2022, at around 10am Singapore time, Celsius announced it was pausing all withdrawals, swap, and transfers between accounts.

“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”

“Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.”

“We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets. Furthermore, customers will continue to accrue rewards during the pause in line with our commitment to our customers.”

(read more…)

There is speculation that Celsius Network is having liquidity issues to cover interest, customer withdrawals.

excerpt from section 13 of the Terms of Use agreement
Excerpt from section 13 of the Terms of Use agreement

The above excerpt from the ‘Terms of Use’ agreement is also worrying.

I got worried about how safe my funds are on other platforms. Listing down statements from platforms that are covered on this site that I managed to find.

(16 June 2022) FAQ page creation

Celsius has created a FAQ page to address some of the questions from concerned users.


Finblox limits withdrawals, pauses rewards and referral payouts

(14 June 2022)

After the Celsius announcement, Finblox sent an email on 14 June 2022 to reassure users that all was well.

read the email from Finblox after Celsius' announcement

Dear Finblox Community,

We are well aware of current market conditions and the fact that some businesses are being scrutinized for their business methods. Trust and security have always been key to our business strategy and would like to ensure you that despite all this, Finblox remains unaffected.

We are a young company with strong fundamentals and conservative risk management. While dealing with established institutions and partners, we do due diligence which includes risk analysis using on-chain monitoring technologies that uncover platform vulnerabilities and fund structures. We’re forward-thinking, but we’re also judicious about broadening our reach and network.

We are committed to providing world-class service and are happy to answer any queries you may have. Thank you again for your confidence in us, and we pledge to continue to earn your trust through utmost transparency.

Best,

Peter and Dmitriy

Co-founders of Finblox

(16 June 2022) Reducing withdrawal limits and pausing rewards:

The media soon started reporting that Three Arrows Capital (3AC) was potentially facing insolvency. It appears Finblox might have made uncollateralized loans to 3AC.

To evaluate the situation, Finblox sent another email saying they will:

  • pause reward distributions on the Finblox platform for all users
  • change 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
Expand for 16 June 2022 (8pm SGT) email contents

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
  • Change 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 to 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

I tried withdrawing 499 USDC via BSC network on three occasions (17-19 June 2022) and all the transactions went through within 30 mins without any hitches.

(20 June 2022) Email update:
Expand for 20 June 2022 email contents

To our Valued Users,

Following up on our previous email from a few days ago, we would like to keep you posted on the current developments and the course of action we are taking.Here are some of the steps we are currently taking to deal with the situation:

  • We are in the process of consolidating all users’ funds to evaluate the current effects of the unfolding situation with the market. This includes withdrawing funds from all partners regardless of the amount to minimize our users’ further exposure to current market conditions. We will update you further on how the market-driven situation has affected users’ account balances as soon as we are in a position to do so.
  • We are actively pursuing all available options (including legal recourse) to address the liquidity situation that has arisen due to the recent developments around Three Arrows Capital (3AC) and the market in general.
  • We are also investigating and assessing a range of possible scenarios and the potential effects that these scenarios could have on the liquidity of our Users’ accounts, including the time frame in which normal business operations and withdrawals (including the restoration of daily withdrawal limits) might be resumed, which we are endeavouring to accomplish as quickly as possible.

Whilst we do so, we would appreciate your patience and support as we continue to work towards a constructive and fair solution for everyone.

As another note on this, we deeply apologize for the current level of service and support Finblox is able to provide as a consequence of recent developments. The team is working harder than ever to find a solution.

Thank you for your understanding, The Finblox Team

(24 June 2022) Email update:

The one positive update received is that Finblox’s treasury was not entrusted to Three Arrows Capital (3AC).

Expand for 24 June 2022 email contents

Dear Finbloxers,

We appreciate your patience in waiting while we have been working hard in the background to assess various options and the potential impact of each option on fund recovery, liquidity, and the restoration of normal operations of the platform.

Over the past week, we have sent multiple demands to Three Arrows Capital (3AC) demanding repayment of the entire loan balance to which we have yet to receive any response. In the meantime, our team has briefed an external legal counsel to provide specialist legal support.

We are also aware of reports that 3AC may have been managing the treasuries of several decentralized finance protocols that it backed. We categorically confirm that Finblox does not have any treasury arrangements with 3AC.

We intend to activate one or more of the following in the shortest time frame possible:

  • Increasing withdrawal limits
  • Re-enabling new deposits
  • Restoring yield reward generation

We will provide an estimated timeline of the above as it becomes available. We know the last few days have been challenging for everyone affected. The recent events have come as a shock not only to us the Finblox team but also to the wider community. Rest assured, the team has been hard at work and taking active steps in the background, and believe we can come out even stronger afterward.

Thank you for your understanding and patience, The Finblox Team

(28 June 2022) Email update:

Key points:

  • All users who hold stablecoins (USDC, BUSD, DAI, USDT, XSGD, XIDR) will have a percentage of their individual stablecoin holdings reserved from withdrawal, but will be able to access their non-reserved portion.
  • non-stablecoins are not impacted and are available for withdrawals under current limits.
  • Reserved assets will not earn rewards until further notice.
Expand for 28 June 2022 email contents

Dear Finbloxers,

We would like to share that since our last announcement, we’ve already re-enabled new deposits and the creation of new asset addresses. Here are other updates that we are able to share at this moment:

  • All users who hold stablecoins (USDC, BUSD, DAI, USDT, XSGD, XIDR) will have a percentage of their individual stablecoin holdings reserved from withdrawal - but will be able to access their non-reserved portion.
  • The percentage of reserved stablecoin holdings is based on factors such as:
    • The user’s balance on 15 June 2022
    • The percentage of their asset contribution to the entire pool
    • The portion of that asset that is affected by illiquidity at this moment
  • To calculate the reserved percentage, we applied the following criteria:
    • Withdrawals initiated before the end of 15 June 2022 (23:59:59 UTC) that were not processed (failure or rejection) will be excluded from this reserve and are still available for withdrawal.
    • Any assets deposited after 15 June 2022 (23:59:59 UTC) will be excluded from reserve and are still available for withdrawal according to the new limitations imposed.
  • We are exploring options including restoring withdrawal limits to their former levels and enabling reward generation. We hope to have a timeframe available soon, as it depends on numerous factors, including market conditions and liquidity. Please note that non-stablecoins are not impacted and are available for withdrawals under current limits.
  • Reserved assets will not earn rewards until further notice.

The Finblox Team has been working hard in the background, and we will continue to work our hardest to resolve the situation and support you, our users.

Thank you for your understanding and patience. The Finblox Team

Updates from other platforms

Cake DeFi

Cake DeFi released a blog post on what sets them apart from Celsius.

Key points:

  • “First and foremost, we want to reassure our customers that the current market conditions have little or no impact on Cake’s daily business.”

  • “As a Singapore-based fintech company, we have to ensure clear asset segregation whereby customers’ assets are kept separate from the company’s operating accounts. Simply put, our users have full control, full ownership and full authority over their funds.”


DeZy

(14 Jun 2022) DeZy shared on Twitter:


(17 Jun 2022) Further update with an email:

Key points:

  • as a precaution, on Monday the 13th of June 2022, DeZy withdrew all funds from all yield protocols into their multi-sig vault with Copper.
  • DeZy has never and will never trade with customer assets or engage in any kind of leveraged activity
  • users continue to earn yield at 5.5% APR with DeZy. Yields are currently coming directly from the DeZy treasury. This is a temporary measure.
  • there is no change in withdrawal limits which is S$20,000 per transaction.
read the full email from DeZy on 17 June 2022

We are writing to inform you that all systems at DeZy are functional and your funds are safe and accessible.

June has been a trying month in terms of both macro and crypto market conditions. We are happy to report that we continue to successfully navigate this situation due to the risk mitigated and customer-first decisions we have made since day one.

Update to DeZy customers

Recent news related to Celsius, 3 Arrows Capital and other ongoing market movements have compelled us to take proactive steps to ensure safety and accessibility of all customer funds.

After closely monitoring market conditions, on Monday the 13th of June 2022 we withdrew all funds from all yield protocols we operate with into our multi-sig vault with Copper.

This step was taken not as a reflection of our trust in the sources of yield we work with but rather as an extraordinary measure of precaution to ensure customer safety.

We made this decision for several reasons:

  • To preempt potential contagion in the industry given the size of entities involved in recent events.
  • In times of uncertainty, we have prioritised prudence. This is our responsibility to each and every one of you.

We were able to do this seamlessly as DeZy has never and will never trade with customer assets or engage in any kind of leveraged activity.

Do I still get returns on my capital?

You will continue to save at 5.5% APR with DeZy. Your yield is currently coming directly from our treasury. This is a temporary measure we have undertaken due to the circumstances the markets are undergoing.

We will inform our customers when funds are redeployed. Your yield will continue to generate in the interim.

Can I withdraw?

Yes, of course. There is no change in withdrawal limits which is S$20,000 per transaction.

We understand, you’re anxious and feel safer with your money in the bank. One of the tenants of our service is that your money is indeed yours. Withdrawals are usually processed in under 24 hours.

Due to increased activity flowing through industry infrastructure intermittent delays in withdrawals may be experienced but this is not in any way related to liquidity issues with DeZy or with StraitsX (our fiat on and off ramp partner). Per the above, all funds have already been removed from protocols.

We are working with StratisX to ensure that withdrawals flow smoothly.

Thank you for trusting us with your savings journey.

Our team at DeZy remains committed to building safe and user friendly access to higher returns. If you have any questions feel free to reach us directly at support@dezy.sg or jump into our discord to speak with the team.

We hope to continue to be a safe haven for you in a tumultuous market.

Best, The DeZy Team, dezy.sg


Haru Invest

Posted by moderator (benjamin) in the Haru Invest Telegram channel:

Haru has a different business model compared to Celsius. Haru is algorithmic trading based and Celsius being borrow-lending business model, as funds are managed in-house and by our trading teams & partners, we have significantly lesser counter-party risk than lets say, Celsius, which has liquidity locked up else where, in this case stETH

As mentioned by Haru’s CEO Hugo, “We don’t entrust any crypto asset in other DeFi or CeFi platforms, like Anchor protocol. All your crypto assets are managed directly by our in-house trading teams and our trusted partners. All our partners have gone though thorough due diligence.”

Our trading and investment strategy remains confidential for competitive advantage. However, Haru’s CEO Hugo shared some short insights into how we generate our yield. Eg. In derivative exchanges, we focus on the gaps and differences of perpetual futures and funding fee.


Hodlnaut

Hodlnaut sent an email addressing current conditions:

On current market conditions

Hodlnaut practices sound risk management policies. Despite the current volatile conditions, all Hodlnaut products & services remain unaffected and are fully operational, including interest payouts, token swaps, deposits and most importantly, withdrawals. We take risk management in the company very seriously and utmost responsibility to customer assets and stakeholders is always at the top of our priority.

(16 Jun 2022) Shared on Discord:

“We would like to reassure all users of the Hodlnaut platform that we do not have any exposure and loans with Three Arrows Capital or Celsius Network. All withdrawals and systems are as per normal. User experience and safety of assets are and remain our top priority.”

(20 Jun 2022) Updates by CEO on Twitter:


Midas.Investments

Midas Investments CEO Trevor posted this statement on Discord:

One of our main yield competitors Celcius [sic] got caught in illiquid positions with their stETH and long-term loans and was forced to stop withdrawals for its users.

A few things I want to clarify:

  1. Midas will not stop withdrawals.

    This is your money. All withdrawals are processed accordingly. Keep in mind that we do not hold our assets on withdrawals wallets, otherwise it would be impossible to generate yield. Therefore, it can be delays in withdrawals. It is normal thing, but Midas will increase the amount of funds on our withdrawal wallets to fill the needs of everyones [sic].

  2. Midas positions are liquid.

    The current portfolio consists from liquid pools and algorithmic strategies. The only illiquid position in our portfolio is a Maven11 USDC pool on Maple finance, but it does not have more than 5% allocation in it.

  3. Midas portfolio is in full de-risk mode for weeks

    While the market suffers, our main priority is in safety of users funds. We have exited all that could be depeged (algo and synthetic stables and assets, like stETH). Most of the yields are coming from algorithmic part of portfolio, that loves volatility, and Midas swap, which fees are sustaining our business model.

  4. Midas is building the new way of yield generation

    We have trend algorithms prepared to notify us for the next opportunity for market reverse. It will open the next risk echelon of the strategies with higher yield.

Meanwhile, we are working to make some of our investment strategies open and accessible to everyone. There will be long, neutral and short strategies that you can enter and exit anytime, earning yields and upside on each market condition.

Midas long-term vision is to become the main CeDeFi platform of the crypto market, and ultimately the biggest crypto-financial platform that generates wealth.

We are using this bear market to deliver something unique to the world. Stay tuned.


Nexo

Nexo proposed to buy-out Celsius Network.

(20 Jun 2022) Shared on Twitter:

“A principle we’ve adhered to since day one. No entity, be it a person or an institution, will receive credit from us without sufficient backing that fulfills our strictest collateralization requirements.”


StableHouse

(15 Jun 2022) Email from StableHouse:

Hey All,

Given the current market context, we feel it’s important to provide a perspective on StableHouse and our view of what’s happening.

At StableHouse, we exist to help new, savvy investors achieve financial growth through crypto, with the stability and security of traditional finance.

To achieve superior risk-adjusted returns, we believe the crypto industry needs to operate with the same rigorous risk management and investment principles seen in traditional finance.

For StableHouse this means:

  • Ensuring extensive due diligence and risk assessment are undertaken for every investment and counterparty
  • maintaining a diversified portfolio of investments and counterparties
  • Partnering with the right regulatory body to offer a recognised and credible offering, the Bermuda Monetary Authority (Why the BMA)
  • Capitalizing on crypto’s ability to be a superior source of collateral to back investments

StableHouse was founded by XBTO group, a leader in cryptofinance who shares our vision in making crypto everyday finance.

Our new members currently have to enter a waitlist, as our current license from the BMA limits the pace of our user and asset growth. We are fortunate to reap this benefit of steady, sustainable growth while we are in the final stages of obtaining our full license.

We started StableHouse with a simple, yet compelling vision: to empower the new generation of investors to benefit from the new world of finance. So everyone can benefit from a future of digital currency in a regulated setting. Our vision is timeless across all market conditions.

Please don’t hesitate to reach out to us at support@stablehouse.io if you have any questions.

Thank you, The StableHouse Team


Tokenize Xchange

(14 Jun 2022) Email from Tokenize Xchange:

Dear Valued Users,

In view of the recent market volatility, Tokenize Xchange remains unaffected and all of our products and services are still fully operational, including our Crypto/Dual Earn Programmes, trading pairs, deposits and withdrawals.

Your security is our utmost priority and we pride ourselves on making our platform safe and secure.

Please rest assured that we have strict risk management policies in place and do not have any dealings with Celsius or any other DeFi protocols.

Additionally, it has always been a consistent Tokenize Xchange policy for having fiat and crypto withdrawal limits based on each user’s memberships.

Kindly refer here for more details - https://tokenizexchange.zendesk.com/hc/en-gb/articles/5953941687705-Withdrawal-Fee-Limit

If you have any further enquiries, please feel free to reach out to the Tokenize Xchange team at support@tokenizexchange.zendesk.com.

To Trading Success, The Tokenize Team


Vauld

(16 Jun 2022) Email from Vauld:

Hey there,

We understand that these are trying times for crypto investors, but Vauld continues to operate as usual despite volatile market conditions.

We have always maintained a balanced and conservative approach to liquidity management. Bull and bear runs are inevitable in the crypto market, and we deploy fundamentally strong strategies that account for these cycles.

We do not have any exposure to Celsius or Three Arrows Capital, and we remain liquid despite market conditions. Over the last few days, all withdrawals were processed as usual and this will continue to be the case in the future.

We believe that such difficult market conditions will eventually give rise to a new wave of innovation and growth, and we are laser-focused on putting our heads down and building for that future.

We remain committed to enabling you to build wealth.

Best, Darshan Bathija, Co-Founder and CEO at Vauld.


YouHodler

(15 Jun 2022) Email from YouHodler:

Too long to paste the entire email but key points are:

  • “To this day in all times of YouHodler’s existence, we have never blocked any withdrawals and are not planning to. Every transaction has been executed and we will not try to convince our clients to keep their funds. We don’t have any sales managers to chase the users and we have everything transparent on our platform. If our users want to withdraw, they can do that in fiat or crypto.”

  • We are not exposed to a similar situation as Celsius is right now. We never participated in any liquidity pool or DeFi protocols, moreover, all our users' funds are always inside the platform. We have more than enough liquidity to cover any possible transactions or withdrawals.”

  • “We are European regulated company, and all our users are protected by European law.”

All these points and even more will be addressed by CEO Ilya Volkov during a AMA (Ask Me Anything) session hosted by CoinTelegraph.


Admin
Admin

Started investing in crypto towards the end of 2020.

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