Crypto trading firm Auros Global appears to be suffering from FTX contagion after missing a principal repayment on a 2,400 Wrapped Ether (wETH) decentralized finance (DeFi) loan.
Institutional credit insurer M11 Credit, which manages liquidity pools on Maple Finance, told its followers in a Nov. 30 Twitter thread that the Auros had missed a principal payment on the 2,400 WETH loan, which has a total value of around 3 million has US dollars.
M11 Credit notes that it is always in close communication with its borrowers, especially after the events of the last month, and said Auros has a “short-term liquidity problem as a result of the FTX insolvency”.
We remain committed to providing transparent updates where possible and are working with Auros to provide a joint statement with further information for lenders.
If you have any questions, please contact [email protected]
5/5
— M11 Credit (@M11Credit) November 30, 2022
While Auros, an algorithmic trading and market-making firm, has yet to address M11 Credit’s statement, the thread was retweeted by Maple Finance itself.
M11 Credit has also emphasized that the missed payment does not mean that the loan is in arrears. Instead, the missed payment triggered a “5-day grace period as per the smart contracts.”
This means Auros has until December 5th to make the late payment before it is declared in default.
According to an official Maple Finance Youtube video, a default could result in the borrower’s collateral being liquidated and/or Maple tokens and USDC being deployed on the platform to cover any shortfalls to lenders. Enforcement actions could also be pursued by New York courts.
M11 credit claims it is “working with Auros to issue a joint statement providing lenders with more information”.
Cointelegraph reached out to both M11 Credit and Auros for comment, but received no response ahead of the time of publication.
Crypto exchange FTX announced Nov. 11 that it would file for bankruptcy after suffering a liquidity crisis and being unable to cash withdrawals. The resulting contagion has spread to numerous other companies. BlockFi filed for bankruptcy on November 28th.
Galois Capital and New Huo Technology lost millions of dollars in the collapse of FTX, and Nestcoin had to lay off employees due to exposure to the failed exchange.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.