- Finblox announced Thursday it will impose a $1,500 monthly withdrawal limit and pause reward distribution amid Three Arrows Capital’s crisis
- The news came after Wednesday’s report that 3AC is facing potential insolvency after a $400 million liquidation
Crypto yield generator Finblox imposed its first monthly withdrawal limit — a relatively paltry $1,500 — and tapped the brakes on divvying out staking rewards as markets continued to froth and foam in the wake of the possible insolvency of longtime digital assets-focused hedge fund firm Three Arrows Capital (3AC).
This move came after Wednesday’s report that 3AC is facing potential insolvency after a $400 million liquidation. Finblox raised a $3.9 million seed round in March — investors such as 3AC, MSA Capital and Coinfund participated in the round.
In a statement, the platform said it made the changes while “pursuing all available options to evaluate the effect of 3AC on the liquidity.”
“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,” Finblox said.
Other changes Finblox announced include delaying referral programs and disabling the creation of crypto addresses for newly registered users.
“Finblox will do everything in its power to protect users’ funds and reinstate our services in full,” the statement said.
Founded by fintech veterans Peter Hoang and Dmitriy Paunin in 2011, the platform helps investors to buy and earn yield on crypto, such as 5% on bitcoin and ether and 12% on stablecoins USDC and USCT.
A spokesperson for the company didn’t immediately respond to a request for comment.
Last Sunday, Finblox rival Celsius paused withdrawals, swaps and transfers between accounts, citing “extreme market conditions” — and triggering the second broad-based market meltdown in as many months.
Other crypto banks in short order worked to publicly distance themselves from Celsius amid the blowback.