Lending Platform TrueFi Issues Notice Of Default To Blockwater
- Renowned decentralized finance lending protocol TrueFi issued a “notice of default” to South Korea’s venture firm Blockwater Technologies.
- Blockwater skipped a scheduled payment on its $3.4 million loan in dollar-pegged stablecoin Binance USD (BUSD).
- According to the DeFi lending company, Blockwater has already repaid its loan with 8 payments totaling more than $645,000.
The ongoing crypto bear market has targeted another victim. On Monday, renowned decentralized finance lending protocol TrueFi announced the issuance of a “notice of default” to South Korea’s venture firm Blockwater Technologies for skipping a scheduled payment on its $3.4 million loan in dollar-pegged stablecoin Binance USD (BUSD).
According to a recent blog post, TrueFi had issued the default notice on October 6 after trying to rectify the default with the executives of Blockwater via an “exhaustive out-of-court workout,” including a loan modification to raise the borrowing rate and extend maturity. However, given the “complexity around the sudden insolvency,” the two entities ultimately agreed to opt for potential “court-supervised” administration for “a better outcome for stakeholders.”
According to the DeFi lending company, Blockwater has already repaid its loan with 8 payments totaling more than $645,000. The company still has to pay the outstanding debt of $2.9 million.
“The Blockwater default does not affect lenders in TrueFi’s USDC, TUSD, USDT stablecoin lending pools, nor any of TrueFi’s capital market portfolios,”
TrueFi stated.
According to the lending platform, its team is actively in talks with Blockwater and its advisors as its current goal is to increase recovery for lenders and stakeholders. Given the difficult market conditions, the company estimates that the debt represents around 2% of its total outstanding value and noted that it will continue to monitor borrowers carefully in general.
TrueFi, a lending and borrowing protocol that enables users to take out uncollateralized loans, claims to have originated over $1.7 billion in unsecured loans and timely collected around $1.5 billion in repayments across 136 loans, managing to generate $34.34 million in interest for its lenders.
Numerous digital-asset lenders and exchanges have fallen apart as a result of the prolonged crypto market crash. The bankruptcy of $10 billion cryptocurrency hedge fund Three Arrows Capital (3AC) and cryptocurrency lenders Celsius and Voyager Digital was prompted by the liquidity crunch and it seems that Blockwater’s default is the latest case of insolvency in the digital asset sector.
TrueFi believes that despite the general market downturn, borrower demand is still high and surpassing capital availability. The loan book is still “healthy and active across both crypto-native and real-world lending,” according to protocol. Additionally, it asserted that neither its capital market portfolios nor the lenders in its USDC, TUSD, or USDT stablecoin lending pools are impacted by the Blockwater failure.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
