In a blog post published by TrueFi, Blockwater, a South Korean investment company, didn’t pay back its uncollateralized loan of $3.4 million.
TrueFi $BUSD Pool Update:
TrueFi issued a notice of default to Blockwater for non-payment on its $3.4m restructured loan
NWH/Invictus entered a Cayman voluntary liquidation proceeding and may not repay its $1.0m loan due 10/30
Bastion has repaid its $10m loan due 10/4 in full
— TrueFi (@TrueFiDAO) October 9, 2022
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.
DeFi Lending Platform TrueFi Announces First Default on BUSD Loan
Earlier today, October 10, decentralized finance (DeFi) lending platform TrueFi issued a notice of default to Blockwater Technologies on missing a scheduled payment over its $3.4 million BUSD loan. pic.twitter.com/eHSs1dSlXW
— IEARN BOT (@IearnBot) October 10, 2022
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.
On October 6th, TrueFi issued a notice of default to Korea-based Blockwater Technologies for missing a scheduled payment due on its amended 3,419,190 BUSD loan, which represents TrueFi’s only declared default to date.
[Twitter wublockchain] #KotakCrypto pic.twitter.com/FzGjwzpg47
— Kotak Crypto (@KotakCrypto) October 10, 2022
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.