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TrueFi’s Loan of $3 Million Has Been Defaulted on by Blockwater, a South Korean Firm

TrueFi’s Loan of $3 Million Has Been Defaulted on by Blockwater, a South Korean Firm

In a blog post published by TrueFi, Blockwater, a South Korean investment company, didn’t pay back its uncollateralized loan of $3.4 million.

A “notice of default” was sent to Blockwater on October 6 when it skipped a payment on a loan in the BUSD stablecoin.

At the time of default, TrueFi had received approximately $650,000 over the course of eight payments, and the total amount owed was estimated to be $2.96 million. According to the lender, the defaulted loan accounts for around 2% of TrueFi’s outstanding amount.

How did the company respond?

In spite of TrueFi’s first default announcement to date, the company said that, in light of the difficult market circumstances, its credit group is “continuing to remain vigilant and aggressive” in ensuring that reporting and compliance obligations are met as soon as possible.

The loan’s initial 90-day maturity period ended during the first week of August. An extension of the maturity date for the $3.4 million loan and a weekly payment plan was negotiated as part of the discussions between the two parties.

A Cryptocurrency User does not need to put up any security for borrowing money from TrueFi. In order to become a borrower on TrueFi, institutions must undergo several Know Your Customer (KYC) checks.

In 2022, many centralized crypto businesses and lenders will experience financial hardship due to the bankruptcy of Blockwater. Defaults on unsecured loans by institutional participants, including Three Arrows Capital and Celsius Network, have plagued the cryptocurrency industry since May.

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