Finblox, a crypto yield platform launched in 2021, shut down on Monday, sparking fresh outrage from customers.
Risto declined to share their last name due to privacy concerns.
Crash out
Risto isn’t the only Finblox customer who says he feels left out to dry.
Launched in 2021, Finblox drew in customers by offering lucrative yields on cryptocurrencies. Its business model was similar to that of other so-called CeFi lenders, such as Celsius, Genesis, and BlockFi, which gained popularity in late 2021 and early 2022.
The platform crashed out after issuing uncollateralised loans to Three Arrows Capital, a crypto hedge fund run by Su Zhu and Kyle Davies that perished in June 2022. Genesis and BlockFi collapsed for similar reasons.
When Three Arrows Capital defaulted on its debts, Finblox couldn’t make good on customer deposits.
It’s not clear how much Finblox lost in the Three Arrow Capital default.
A version of the Finblox website from April 2022, accessed through internet archives, shows the platform advertising that deposits on the platform were insured up to $45 million.
With many Finblox customers claiming the platform didn’t refund them, it follows that the amount of deposits may have exceeded $45 million.
With few options left, Finblox converted customer funds into FBX, a token it had created itself.
Around 60 customers previously banded together on Telegram, the messaging app, to complain that the conversion wasn’t properly communicated and that they didn’t agree to it.
As for the FBX token customers were left with?
After a brief surge in June 2023, it has steadily bled value. It’s now down 99% from its all-time high and trades at $0.0000003.
