Lender M11 Credit has sent Orthogonal Trading a notice of default for a $31 million cryptocurrency loan. Thereafter, Maple Finance severed ties with Orthogonal Trading, claiming it misrepresented the financial situation.
Maple Finance has terminated its relationship with Orthogonal Trading
Maple Finance, a major blockchain-based lending platform, has cut ties with crypto firm Orthogonal Trading. Maple alleges that the crypto company ‘has provided false information about its financial situation. Meanwhile, Orthogonal had secured a $10 million USDC stablecoin loan from a loan pool managed by M11 Credit. The problem arose after he failed to repay this loan.
Orthogonal became a major borrower in Maple. He is also the manager and contractor of a loan pool at Maple. M11 Credit has submitted a default notice to Orthogonal for all outstanding active loans in Maple’s USDC stablecoin pool, along with $31 million in current debt on four loans. Maple said in a statement that Orthogonal was “effectively operating while in bankruptcy.” He also noted that he did not communicate about paying the debt. Maple also included the following in the statement:
Misrepresentation like this is against Maple’s agreements. In addition, all appropriate legal avenues will be followed, including arbitration or litigation required to recover funds.
Cryptocurrency company Orthogonal Trading is sinking!
It’s possible that Orthogonal’s default will deal another blow to cryptocurrency lending and unsecured loan protocols. Also, as you follow on Kriptokoin.com, the market is still grappling with the consequences of the crypto exchange FTX’s explosion.
Maple Finance and M11 Credit were also dealing with Auros Global’s problem repaying a loan. Market maker Auros Global is also in financial difficulty. Meanwhile, Orthogonal has yet to respond to requests for clarification. In a blog post on Monday, M11 Credit wrote that Orthogonal was informed on Dec. Therefore, he noted that as a result the debtor could not pay his debt. In its statement, M11 Credit also underlined the following:
We were extremely shocked by the actions of Orthogonal Trading. Also, it was a complete disappointment. He has deliberately provided false information during the numerous communications we have had over the past few weeks. As such, it has severely impacted our ability to manage our outstanding credit risk.
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