Bessie Liu

A way to earn sustainable yield has landed in Southeast Asia.



Cryptocurrency asset management platform Finblox is bringing tokenized US Treasurys to emerging markets across Southeast Asia.



The Singapore-based startup’s self proclaimed “superapp” will be partnering with OpenEden to bring a smart contract vault that provides 24/7 access to tokenized Treasury bills.



The plan is for the product to be made available to customers in the Philippines, Indonesia, India and Vietnam.&nbsp;&nbsp;



A significant portion of the unbanked population live in emerging markets, Peter Hoang, CEO of Finblox told Blockworks. The partnership ought to offer a safer, less risky mechanism to offer sustainable <a href="https://blockworks.co/tag/yield">yield</a>, he said.&nbsp;



“Treasury bills are considered to be one of the safest assets on earth,” Hoang said. “OpenEden is an institution that is accredited and licensed by the Monetary Authority of Singapore, and are aligned with our vision of democratizing finance and building in a safe and transparent way.”



Hoang said tokenized Treasurys will give international investors the opportunity and flexibility to invest in safe and secure assets at smaller clips.&nbsp;



OpenEden’s Treasury bill vault will be integrated with <a href="https://blockworks.co/tag/chainlink">Chainlink</a> and will provide on-chain evidence that its tokens are backed by actual assets.&nbsp;



“Through the OpenEden TBILL Vault, our partners can offer low-risk cash management products that generate sustainable yields from U.S. Treasuries to their users,&#8221; Eugene Ng, co-founder of OpenEden, said in a statement.



T-bill tokens will not be transferable, but users can withdraw the token from the vault after five days to avoid a duration mismatch.



“We’ve seen the downfall of many players last year because of unsustainable practices. This has caused a lot of mistrust in the entire crypto space… we believe that [US Treasurys] will be one of the products that will regain trust of users over time,” he said.



Holding tokenized T-bills still comes with risks.&nbsp;



The first, albeit highly unlikely, risk is government default. The second is smart contract risks.



“Usually 95% of assets are deployed, only 5% is held in a vault for withdrawals, so that 5% is subject to smart contract riks,” he said.



As Finblox is a regulated entity, it requires customers to complete two levels of regulation before being eligible to purchase Treasurys: ID verification and proof of address.



“We determine the limits for deposits and withdrawals based on the verifications,”&nbsp; Hoang said.



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Tokenized US Treasury bills are entering emerging markets

Jocelyn Yang

<div id="highlights-block_62be0900db05e" class="highlights">
 <ul>
 <li>Finblox announced Thursday that it will restore staking reward payouts and increase monthly withdrawal limits</li>
 <li>The move follows a British Virgin Islands court ordering 3AC into liquidation earlier this week</li>
 </ul>
 
</div>



Crypto yield generator Finblox is rolling back withdrawal limits imposed earlier this month as digital asset markets reeled from the potential insolvency of Three Arrows Capital.



Hong Kong-based Finblox first <a href="https://cms.blockworks.co/finblox-imposes-withdrawal-limit-amid-3acs-uncertainty/" target="_blank" rel="noreferrer noopener">imposed a $1,500 cap on monthly withdrawals</a> on June 16 and suspended staking rewards when major crypto hedge fund firm 3AC’s financial strife first <a href="https://cms.blockworks.co/crypto-fund-three-arrows-capital-facing-potential-insolvency-report/" target="_blank" rel="noreferrer noopener">came to light</a>.



Following 3AC&#8217;s ordered <a href="https://cms.blockworks.co/three-arrows-capital-ordered-into-liquidation-by-bvi-court-report/" target="_blank" rel="noreferrer noopener">liquidation</a> from a British Virgin Islands court earlier this week and Finblox&#8217;s assessment of the firm, the crypto savings platform reckons the coast is clear and plans to boost its monthly withdrawal limit to $30,000 starting July 1 — and up to $500,000 after July 5 for verified users.&nbsp;



Daily withdrawals will initially be capped at $3,000 per day before rising to $50,000 alongside monthly limits.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">IMPORTANT ANNOUNCEMENT FROM FINBLOX ❤️ <a href="https://t.co/Ks98RSTKpp">pic.twitter.com/Ks98RSTKpp</a>&mdash; Finblox (@finblox) <a href="https://twitter.com/finblox/status/1542534054779551746?ref_src=twsrc%5Etfw">June 30, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Finblox paused yield payments on a raft of stablecoins among the 20 cryptoassets available on the platform, but Peter Hoang, CEO of Finblox, told Blockworks that stablecoins weren’t the main draw for most of its users, who are mainly based in Southeast Asia.



In a statement, the platform said it will restore rewards tied to its referral program. Starting July 1, it will also increase the existing yields, including 4% on bitcoin, 4.3% on ether, 4.3% on USD Coin (USDC) and 3.9% on tether (USDT).&nbsp;



For now, the firm is allowing users more to access their funds while the Finblox team continues working with parties spurned by 3AC, Hoang said.&nbsp;



Founded in 2021, Finblox helps investors buy and earn yield on crypto. The company <a href="https://www.crunchbase.com/search/funding_rounds/field/organizations/num_investments/three-arrows-capital" target="_blank" rel="noreferrer noopener">raised</a> $3.9 million in a seed round last year from a collection of venture capital firms, including 3AC, Coinfund and Sequoia Capital India.



“I think unsecured lending will be less common in the future,” Hoang told Blockworks. “Given even the largest players were engaged in that…from a risk management perspective, it doesn’t matter how big or well established your counterparties are, there has to be prudent risk management going forward,” he said.



“Three Arrows Capital was considered blue-chip, and among the largest and most trusted players in the crypto lending space just a few weeks ago. It is a Lehman moment for the industry — no one is too big to fail,” Hoang added in a statement following his interview with Blockworks.



Facing a liquidity crunch of its own, Finblox rival Celsius <a href="https://cms.blockworks.co/celsius-lending-platform-suspends-withdrawals-and-transfers/" target="_blank" rel="noreferrer noopener">paused</a> withdrawals, swaps and transfers between accounts, citing “extreme market conditions” earlier this month, just days before 3AC’s troubles stirred turbulence across digital asset markets.



While handling the operation restoration, Hoang said his firm is looking to begin operating its own launchpads for crypto projects. Debit and credit card which will likely happen in 2023, according to the fintech veteran.



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Finblox Increases Withdrawal Limits Following 3AC Assessment

<div id="highlights-block_62b98c3f4fa1a" class="highlights">
 <ul>
 <li>Celsius was one of the major players to shake the crypto world after it paused withdrawals, swaps and transfers between accounts</li>
 <li>The market contagion led more exchanges and banks to carry out emergency assessments based on the firms’ liquidity status</li>
 </ul>
 
</div>



Multiple cryptocurrency exchanges and lending platforms have announced halts on withdrawals in the past two weeks as markets across the world have grappled with bear territory.&nbsp;



Here’s a timeline outlining the exchanges and lending platforms that have faced liquidity pressure.&nbsp;



<h3 class="wp-block-heading">Week of June 13&nbsp;</h3>



Crypto lending platform <a href="https://cms.blockworks.co/celsius-lending-platform-suspends-withdrawals-and-transfers/" target="_blank" rel="noreferrer noopener">Celsius</a> was one of the major players that first shook the crypto world when it announced it would pause withdrawals, swaps and transfers between accounts on its platform due to “extreme market conditions” ahead of the Monday market open on June 13.&nbsp;



Market contagion set in; the next morning, <a href="https://twitter.com/binance/status/1536398693523501056?s=20&amp;t=52LiWVMEesEcbAb6O3vmoQ" target="_blank" rel="noreferrer noopener">Binance</a> paused bitcoin withdrawals for about three hours as the crypto exchange dealt with the impact of Celsius&#8217; move. Some crypto banks have also worked to publicly distance themselves from Celsius due to the crisis.&nbsp;



On Wednesday, more market volatility came after it was reported digital assets-focused hedge fund firm <a href="https://cms.blockworks.co/crypto-fund-three-arrows-capital-facing-potential-insolvency-report/" target="_blank" rel="noreferrer noopener">Three Arrows Capital (3AC) is facing potential insolvency</a> after a $400 million liquidation. The firm had already taken a major hit with Terra USD stablecoin’s <a href="https://cms.blockworks.co/?s=terra" target="_blank" rel="noreferrer noopener">collapse in May</a>, due to its substantial investment in LUNA.&nbsp;



On Thursday, <a href="https://cms.blockworks.co/finblox-imposes-withdrawal-limit-amid-3acs-uncertainty/" target="_blank" rel="noreferrer noopener">Finblox</a>, a Hong-Kong based crypto staking and yield generation platform which secured investment from 3AC, said it will impose a $1,500 monthly withdrawal limit and pause reward distribution amid 3AC’s uncertainty.&nbsp;



“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 in a statement.&nbsp;



Crypto lender <a href="https://babel.finance/article-views.html?id=50" target="_blank" rel="noreferrer noopener">Babel Finance</a> suspended withdrawals and redemptions on Friday, citing “unusual liquidity pressures.” The platform gave an <a href="https://cms.blockworks.co/babel-finance-working-to-ease-unusual-liquidity-pressures/" target="_blank" rel="noreferrer noopener">update</a> the following Monday that it has “reached preliminary agreements on the repayment period of some debts” to ease its liquidity pressure in the short term.



<h3 class="wp-block-heading">Week of June 20</h3>



On the eve of Monday market opening, Hong Kong-based crypto exchange Hoo said in a <a href="https://help.hoorhi.shop/hc/en-us/articles/7639261299353" target="_blank" rel="noreferrer noopener">blog post</a> it would be delaying withdrawals for 24 to 72 hours, citing “market volatility and liquidations by large institutions in the crypto industry,” raising panic among its users as many looked to request withdrawals. The exchange <a href="https://help.hoorhi.shop/hc/en-us/articles/7749830351129-Announcement-on-Openning-Withdrawal-Currency-of-Hoo" target="_blank" rel="noreferrer noopener">reopened withdrawal</a> for some tokens starting Wednesday.&nbsp;



In its latest announcement, posted on Friday, Hoo <a href="https://help.hoorhi.shop/hc/en-us/articles/7826670082073-Supplementary-notice-on-the-token-withdrawals-of-Hoo" target="_blank" rel="noreferrer noopener">said</a> some of its partners and institutions have faced liquidity issues, which resulted in &#8220;the unusual phenomenon of Hoo’s custodian fund return channels in these institutions.”&nbsp;



“At present, Hoo is actively communicating and solving problems with relevant institutions and third parties,” the statement read.&nbsp;



Meanwhile, crypto broker <a href="https://cms.blockworks.co/three-arrows-capital-brink-default-owes-voyager-657m/" target="_blank" rel="noreferrer noopener">Voyager Digital</a> revealed Wednesday it had exposure to 3AC — the company sought to recover about $657 million allegedly loaned to the hedge fund.



Australia-based crypto lender <a href="https://cms.blockworks.co/crypto-lender-maple-finance-latest-to-warn-of-insufficient-cash-amid-market-turmoil/" target="_blank" rel="noreferrer noopener">Maple Finance</a> also faced liquidity pressures and said Tuesday its lenders must wait for borrower repayments. “There may be instances where there is insufficient cash in pools,” the company <a href="https://maple.finance/news/managing-liquidity/" target="_blank" rel="noreferrer noopener">said</a>.&nbsp;



Crypto exchange <a href="https://cms.blockworks.co/coinflex-halts-withdrawals-citing-uncertainty-around-unnamed-counterparty/" target="_blank" rel="noreferrer noopener">CoinFLEX</a> was one of the most recent firms to announce a pause in withdrawals, the company said Thursday. Customers can continue to trade and deposit, but no funds can be taken off the platform, according to a statement.



<h3 class="wp-block-heading">What&#8217;s in store for the week of June 27?</h3>



There remains a great deal of uncertainty heading into the final week of June, and market participants are proceeding with trepidation, mindful of potential shoes yet to drop.



On Monday, Voyager issued a notice of default to 3AC after the latter failed to make any required payments.



&#8220;Voyager intends to pursue recovery from 3AC and is in discussions with the Company&#8217;s advisors as to legal remedies available,&#8221; the company wrote in a press release, declining Blockworks&#8217; request for further comment.



The company has engaged Moelis &amp; Company as financial advisors, and it has accessed the first $75 million of its <a href="https://cms.blockworks.co/voyager-to-borrow-500m-from-alameda-amid-insolvency-rumors/" target="_blank" rel="noreferrer noopener">line of credit with Alameda Research</a>, according to the statement.



“When one of the largest crypto hedge funds can be underwater due to leverage, participants in the market must be aware of the total leverage in the market and how it is affected during times when this credit suddenly vanishes,” Mads Eberhardt, cryptocurrency analyst at Saxo Bank, <a href="https://www.home.saxo/content/articles/cryptocurrencies/crypto-weekly-20062022" target="_blank" rel="noreferrer noopener">wrote in a blog post</a>.



“[That] has the power to take many crypto lenders to their knees, effectively fueling the contagion further,” he noted.



This story was updated on June 27, 2022, at 8:15 am ET.



Correction, June 28, 2022, at 10:30 am ET: Mads Eberhardt&#8217;s comments came from the Saxo Bank blog.



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Crypto Firms On Alert During Market Uncertainty as 3AC Defaults

<div id="highlights-block_62ab9b36b584b" class="highlights">
 <ul>
 <li>Finblox announced Thursday it will impose a $1,500 monthly withdrawal limit and pause reward distribution amid Three Arrows Capital’s crisis</li>
 <li>The news came after Wednesday’s report that 3AC is facing potential insolvency after a $400 million liquidation</li>
 </ul>
 
</div>



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 <a href="https://cms.blockworks.co/crypto-fund-three-arrows-capital-facing-potential-insolvency-report/" target="_blank" rel="noreferrer noopener">Three Arrows Capital</a> (3AC).&nbsp;



This move came after Wednesday’s report that 3AC is facing <a href="https://cms.blockworks.co/crypto-fund-three-arrows-capital-facing-potential-insolvency-report/" target="_blank" rel="noreferrer noopener">potential insolvency</a> after a $400 million liquidation. Finblox raised a <a href="https://www.crunchbase.com/search/funding_rounds/field/organizations/num_investments/three-arrows-capital" target="_blank" rel="noreferrer noopener">$3.9 million seed round</a> in March — investors such as 3AC, MSA Capital and Coinfund participated in the round.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">IMPORTANT UPDATE FROM FINBLOX! <a href="https://t.co/VjclRMMiSe">pic.twitter.com/VjclRMMiSe</a>&mdash; Finblox (@finblox) <a href="https://twitter.com/finblox/status/1537414199890296838?ref_src=twsrc%5Etfw">June 16, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In a statement, the platform said it made the changes while “pursuing all available options to evaluate the effect of 3AC on the liquidity.”&nbsp;



“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.&nbsp;



“Finblox will do everything in its power to protect users&#8217; funds and reinstate our services in full,” the statement said.&nbsp;



Founded by fintech veterans Peter Hoang and Dmitriy Paunin in 2011, the platform helps investors to buy and earn yield on crypto, such as <a href="https://finblox.com/?utm_campaign=finblog" target="_blank" rel="noreferrer noopener">5% on bitcoin and ether and 12% on stablecoins USDC and USCT</a>.&nbsp;



A spokesperson for the company didn’t immediately respond to a request for comment.&nbsp;



Last Sunday, Finblox rival Celsius <a href="https://cms.blockworks.co/celsius-lending-platform-suspends-withdrawals-and-transfers/" target="_blank" rel="noreferrer noopener">paused withdrawals, swaps and transfers</a> between accounts, citing “extreme market conditions” — and triggering the second broad-based market meltdown in as many months.&nbsp;



Other crypto banks in short order worked to publicly <a href="https://cms.blockworks.co/celsius-withdrawal-halt-reveals-run-risks-on-other-crypto-banks/" target="_blank" rel="noreferrer noopener">distance themselves from Celsius</a> amid the blowback.



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