TrueFi, a decentralized lending platform, stated in a statement Sunday that South Korean blockchain investment firm Blockwater Technologies had defaulted on a loan.
TrueFi filed a “notice of default” to Blockwater on October 6 after it failed to make payments on a $3.4 million loan in Binance USD (BUSD) stablecoin.
After TrueFi and Blockwater modified the loan and extended the payment period in August, Blockwater defaulted on their obligation. After the restructuring attempts, Blockwater was able to repay $654,000 of its outstanding debt, but it eventually skipped payment. The remaining debt is about $3 million.
According to the loan procedure, TrueFi assessed that a prospective court-supervised administrative action would result in a better outcome for stakeholders given the intricacy surrounding the abrupt insolvency.
TrueFi stated it is still in “active discussions” with Blockwater and that Blockwater’s insolvency has no effect on the protocol’s other loan pools.
The default of Blockwater appears to be the latest illustration of the crypto industry’s insolvency issue.
This year’s dramatic crypto market downturn, exacerbated by the Terra blockchain implosion, has resulted in the bankruptcy of several high-profile crypto firms, including hedge fund Three Arrows Capital (3AC), crypto lender Celsius Network, digital asset broker Voyager Digital, and crypto-mining data center operator Compute North.
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