Finblox, a crypto-staking platform based in Hong Kong, announced that it has increased its daily withdrawal limit to $3,000.
Two weeks ago, the firm imposed a withdrawal limit of $1,500 monthly and suspended rewards due to uncertainty facing Singapore-based crypto hedge fund Three Arrows Capital (3AC).
Peter Hoang, Finblox CEO, talked about the development: “We are doing everything in our power to restore faith in our platform, unlock the access to the users’ funds affected by this market event and complete the return to normal operations.”
Finblox has reinstated its platform’s yield generation, payouts, and referral program rewards. The firm further said it plans to raise a daily withdrawal limit of $50,000 for verified users next week.
On June 16, Three Arrows Capital faced insolvency fears after incurring at least $400 million in liquidations. 3AC was liquidated by crypto lending firms and is currently being expected to repay loans to lenders and other counterparties.
Finblox, one of its counterparties, said it has sent several demands to Three Arrows Capital, requesting for the entire loan to be repaid in full. So far, Finbox said it is seeking legal remedies to enable it to recover funds from 3AC.
3AC’s Woes Hit Multiple Firms
The recent fall in crypto prices has wiped out billions of dollars in value and sent the entire market capitalization under US$900 billion.
The price plunged after the collapse of Terraform Labs’ TerraUSD stablecoin and its affiliate cryptocurrency Luna in early May, both of which Three Arrows Capital was exposed to as a critical backer of Terraform.
The impact of 3AC has been wide-ranging. Last week, crypto broker Voyager Digital issued a notice of default to 3AC after the crypto hedge fund failed to repay a loan of US$350 million in USDC stablecoin and 15,250 Bitcoin worth US$324 million.
BlockFi said it had liquidated some of 3AC’s positions earlier this month. Three Arrows Capital had borrowed funds from BlockFi but was unable to meet the margin call.
The collapse of 3AC has also dragged crypto broker Genesis Trading into financial poverty. Genesis Trading, a crypto brokerage firm based in New York, is facing “hundreds of millions” of dollars in potential losses because of its exposure to Three Arrows Capital.
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