Nexus Mutual is likely expecting a $3 million loss resulting from Orthogonal Trading’s inability to repay its $36 million loan. Hence, Nexus seeks to divest from Maple Finance’s M11 Credit pool.
Announcing this in a Twitter post, Nexus stated it received notifications from M11 and Maple Finance about issues with specific loans in the M11 Credit wETH lending pool. Yesterday, crypto lending firm, Maple Finance, severed ties with Orthogonal Trading due to this loan default, citing misrepresentation of financial positions.
In light of this, Nexus has taken immediate action by initiating the ten days waiting period to withdraw all available funds from the M11 Credit pool on Maple.
According to an update provided by Nexus Mutual,
“Swift action was taken to start the withdrawal process for these funds. There is a 10-day waiting period before any capital can be withdrawn. This decision was made to maximize recovery for Nexus Mutual.”
Nexus is losing about 2,461 ETH, which is roughly $3 million. The company also stated its expected losses represent an estimated 1.5% to 2.6% of its assets.
Nexus claims this development does not affect its daily operations or ability to pay claims. This is because it expects a high recovery on the wETH loans paid to Auros. Nexus was earlier notified about Auros’ short-term liquidity issues, which affected its ability to repay its loans.
However, M11 Credit reviewed Auros’ latest financial statements and their path to recovery and provided them with a short-term extension. Hence, only minimal loss is expected from Auros compared to Orthogonal Trading.
Nexus also declared its support for Maple Finance and M11 Credit’s legal moves to recover Orthogonal’s loan.
