Crypto savings app Finblox is imposing a withdrawal limit and preventing new users from registering due to uncertainty over the future of crypto hedge fund Three Arrows Capital.
The latter is a major investor in Finblox, and the savings platform has said that it is closely monitoring the situation.
IMPORTANT UPDATE FROM FINBLOX! pic.twitter.com/VjclRMMiSe
— Finblox (@finblox) June 16, 2022
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,” the company said.
Finblox is imposing a daily withdrawal limit of $500 for all users, or $1,500 per month. Other measures being taken include disabling the creation of new addresses and delaying referral program and deposit rewards.
Finblox helps investors earn yield
Finblox was founded by fintech veterans Peter Hoang and Dmitriy Paunin in 2011. The platform helps investors to buy and earn yield on crypto, such as bitcoin and Ethereum, and stablecoins USDC and USCT.
Three Arrows Capital is reportedly on the verge of insolvency after it failed to lender margin calls. There are also reports that the company was offering treasury management services to the many companies in its investment portfolio.
Avalanche Foundation recently confirmed that 3AC has not managed or used any of its treasury funds. Another lending platform – Celsius Network – is also suffering its own financial troubles.
The same is true for Ava Labs. 3AC has never in any way managed, used, or custodied any Ava Labs treasury funds. https://t.co/1v8nZpzlaF
— Ava Labs ?? (@avalabsofficial) June 16, 2022
Crypto market delivers brutal blows to firms
Celsius paused withdrawals, swaps, and transfers between accounts at the weekend citing “extreme market conditions” triggering the second broad-based market meltdown in recent months.
A recent Wall Street Journal report says that Celsius Networks’ private investors are unlikely to provide more funds to bail out the company. The platform is currently considering undergoing financial restructuring and has hired insolvency experts to that end.
