Revix has suspended withdrawals of 24% of its customers’ deposits, after a freeze on withdrawals by one of its custody partners in South Korea.
Bruce Whitfield interviews Carel de Jager, crypto lead at the Council for Scientific and Industrial Research.
South African investors have been drawn into fresh trouble brewing in the world of crypto.
Local crypto investment platform Revix has announced it’s suspending withdrawals of nearly a quarter of its customers’ assets, after a freeze on withdrawals by one of its custody partners in South Korea.
Haru Invest is a regulated virtual asset service provider (VASP) in the European Union, and is licensed as a Money Service Business (MSB) in the US, Revix said in a statement.
The South Korea-based company said it froze withdrawls after discovering irregularities in respect of one of its service partners.
In its latest statement on 26 June, Haru said it “is still trying to determine the extent of the losses at B&S”.
Haru’s answer to your inquiries: https://t.co/5TBT3AhjdW
‘ Haru Invest (@haruinvest) June 26, 2023
Bruce Whitfield gets more detail from Carel de Jager, crypto lead at the Council for Scientific and Industrial Research (CSIR).
De Jager explains that Revix used a different combination of custody providers, which means the platform didn’t necessarily keep its access keys to all of the crypto that it holds.
He outlines the reasons for this structure:
One is because it provides a little bit of an alternative risk profile, which Revix was more comfortable with and secondly, it provided the opportunity to earn yields or interest on these crypto assets.
Carel de Jager, Crypto Lead – CSIR
One of these providers was Haru Invest in Korea, who suddenly halted withdrawals about a week back because of troubles in their country… Of course filtered this through to Revix, and now it seems to us that about 24% of all Revix’s crypto assets were held at that custodian and are now inaccessible.
Carel de Jager, Crypto Lead – CSIR
De Jager says Revix made its customers aware of the situation only sometime on Wednesday which is perhaps understandable, as the company had to assess its own risk and possibly implement some of the measures needed to halt the percentage of its withdrawals.
While it is difficult to predict what is going to happen going forward, “these things usually don’t end well” he says.
Revix’s custody provider Haru is now busy with legal proceedings in the USA against the platform that it has used, so it’s all entertwined and at this point it doesn’t look very good.
Carel de Jager, Crypto Lead – CSIR
While crypto investing comes with massive benefits, it also comes with massive risk he points out.
Scroll up to listen to de Jager’s advice on how to _try _and protect yourself in the crypto space
