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Midas Investments shuts down, taking over 55% of customers’ funds

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(Kitco News) –
Midas Investments, the hybrid centralized/decentralized (CeDeFi) cryptocurrency platform, announced Tuesday that they will shut down operations as of Dec. 27 and will deduct 55% from most customer accounts to “balance assets and liabilities.” This morning, Midas’ CEO shut down his own AMA with customers after less than half an hour.

“I am writing to you today with a heavy heart to announce that the Midas platform is closing down,” wrote Iakov Levin, CEO of Midas Investments, who also goes by ‘Trevor,’ in a Dec. 27 blog post.

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Levin said that in the spring of 2022, the advent of the crypto winter saw Midas’ DeFi portfolio lose $50 million of its $250 million market value, or 20%. Then, following the bankruptcy of Celsius on Jul. 13 and FTX on Nov. 11, “the platform experienced over 60% of AUM being withdrawn, creating a large asset deficit” of $63.3 million, based on assets of $51.7 million against liabilities of $115 million in BTC, ETH and stablecoins.

“Based on this situation and current CeFi market conditions, we have reached the difficult decision to close the platform,” Levin wrote.

Levin wrote that his team spent the past eight months trying to find ways to balance their assets and liabilities, including “launching CeDeFi strategies, seeking fundraising, and exploring opportunities with DeFi protocols. Despite these efforts, the extensive withdrawals due to the insolvency of Celcius and FTX, coupled with reduced yield opportunities on the market, made it impossible for us to cover daily payouts to users due to the assets deficit.”

Levin said that only Midas’ C-level executives knew about the asset deficit, and the community, marketing, support, IT, and platform teams were not aware. “The asset deficit was caused by the long-term risk of DeFi investment, the instability of our business model after the loss of assets, and the illiquidity of the Midas token,” he said.

Midas also outlined its plan to balance assets and liabilities, saying that as of Dec. 27 at 11:00 AM UTC, deposits and swaps have been disabled on the platform. They then will deduct 55% of the balances of users with over $5000 in their accounts, along with the earned rewards of all users, and leave the balance in users’ accounts. “Withdrawals will be disabled for 2-3 hours while we ensure that calculations and balance adjustments have been made correctly,” Levin wrote. “Once this is done, you will be able to withdraw the remaining assets from the platform, with any rewards earned being deducted from your balance.”

Levin also said that users would be issued MIDAS tokens equivalent to the deductions as compensation, which will later be swapped for the tokens of Midas’ next project, which he then outlined.

“In January, Midas will focus on market research and prototyping for DeFi and CeDeFi business models, as well as creating prototype vaults and strategies and developing new investment processes,” Levin wrote. “In February, the team will continue with market research and begin investment traction, working on the development of a minimum viable product and engaging with DeFi protocols.”

Levin said that private tests of the product will be conducted in March, and in April, Midas plans to swap the current tokens for the new ones.

“The goal of the new project is to create a win-win situation by connecting competing protocols with liquidity and offering a simplified yield to a range of DeFi and CeFi audiences,” he said. “The first product will be a transparent, on-chain treasury that allows users to mint tokens backed by stablecoins, BTC, or ETH by depositing collateral in ETH.”

Levin held an AMA session with Midas customers on YouTube this morning, and he began with a mea culpa.

“I know it was really hard for you guys, and I’m incredibly sorry that it came to this,” he said. “I am taking the responsibility and trying to explain what happened. I understand that it does not give you money back that you lost with Midas, I understand that you want to burn everything related to Midas now, and I obviously accept it.”

Levin said he was responsible for the vision and decision-making and he made “huge mistakes” as the CEO of Midas. “I was incompetent, and my team, we were incompetent in managing funds. We did not understand the impact of having […] $300 million that we got in March.”

Levin then began answering the submitted questions, which included harsh criticism and accusations from Midas customers about his decisions and the losses they caused. After 27 minutes, he claimed he was going to fix his screen sharing and disconnected, but never returned.

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OMERS names capital markets head as next chief investment officer – The Globe and Mail

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Ontario Municipal Employees Retirement System (OMERS) has named capital markets head Ralph Berg as its next chief investment officer, succeeding Satish Rai.

Mr. Berg starts as CIO on April 1 after two years as global head of OMERS Capital Markets, where he oversaw the public-market investments that make up more than half of investment assets at the pension plan.

In April, Mr. Rai will move to an advisory role and plans to retire from OMERS late in 2024. He has been CIO since 2018 and also led OMERS’ capital markets arm during his eight years at the pension plan, while helping guide its expansion into Asian markets. He was previously CIO at TD Asset Management, a division of Toronto-Dominion Bank.

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Mr. Berg has been at OMERS since 2013. He joined the pension plan as global head of its infrastructure arm after a career in banking at Credit Suisse Group AG and Deutsche Bank AG.

“Ralph is a proven investor and a seasoned executive,” said OMERS chief executive officer Blake Hutcheson, in a news release.

Mr. Berg’s successor as head of capital markets has yet to be announced.

OMERS had $119.5-billion of assets as of June 30 last year. Over Mr. Rai’s tenure as CIO, it has shifted more of its assets from public to private markets, which helped OMERS post steady results in the first half of last year, losing only 0.4 per cent despite difficult market conditions.

That came after two volatile years in the COVID-19 pandemic that included an 11.4-per-cent loss in 2020 – when OMERS marked down real estate and private equity holdings that were affected by strict public health measures – and a rebound in 2021 that saw the plan’s assets gain 15.7-per-cent.

As Mr. Rai prepares to step down, Mr. Hutcheson said: “I look forward to his continued commitment and counsel” in his advisory role.

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Ark Invest Cathie Wood: artificial intelligence chatGPT – CNBC

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Forget ChatGPT — an AI-driven investment fund powered by IBM's Watson supercomputer is quietly beating the market by nearly 100% – Yahoo Canada Finance

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The Watson-powered ETF is beating a total market fund by nearly 100%.PhonlamaiPhoto/Getty Images

  • While the language bot ChatGPT has gone viral, a Watson-powered ETF is making nearly double the returns of the broader market.

  • The AI Powered Equity ETF is up 10.4% in 2023, whereas the Vanguard Total Stock Market Index is up 5.67%.

  • IBM’s Watson supercomputer helps balance the fund’s portfolio holdings.

The popular language bot ChatGPT has shown a humanlike ability to render articles, emails, and even dating-app messages. But if you ask it to generate a portfolio that can beat the market, it spits out boilerplate information and reminds you it doesn’t have access to live stock data.

Yet, the $102 million AI Powered Equity ETF (AIEQ), which launched in 2017, has been quietly fulfilling that request so far this year. Issued by ETF Managers Group in partnership with the fintech firm Equbot, the fund leans on IBM’s Watson supercomputer to balance its portfolio.

That 114-holding portfolio is up 10.4% so far in 2023, while the Vanguard Total Stock Market ETF is up 5% over the same stretch.

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Still, as ETF.com highlighted, the former is actively managed, and thus more expensive than the benchmark fund, cutting into actual returns to investors. The AI-powered ETF charges 0.75%, whereas Vanguard’s costs 0.03%. Both funds include JPMorgan and UnitedHealth Group in their top-10 holdings.

Chris Natividad, the chief investment officer of Equbot, said the Watson-powered fund can look beyond standard market data and cull information from tweets and earnings calls, according to ETF.com.

“We’re focused on investment related data, looking at how these different types of signals impact security practices across different time horizons,” Natividad said, per ETF.com.

“The best days of the fund are still ahead of it,” he added. “And just as you’ll see ChatGPT’s responses change and evolve with time and data, so will our fund.”

Meanwhile, ChatGPT’s parent company, OpenAI, this month secured a $10 billion investment from Microsoft this month, and the technology continues to make waves across sectors.

Online media outlet BuzzFeed announced last week it plans to leverage the technology to create content, educators are warning about the bot’s repercussions in schools, and chipmakers are poised to cash in.

Read the original article on Business Insider

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