According to TrueFi’s tweet, “TrueFi $BUSD Pool Update: TrueFi issued a notice of default to Blockwater for non-payment on its $3.4m restructured loan…”
DeFi lending platform, TrueFi has issued a notice of default to Blockwater Technologies, a crypto investment firm. This was following the firm’s failure to keep to a scheduled payment of more than $3.4 million BUSD loan.
This default comes after the restructuring of the loan by TrueFi. TrueFi also made a payment extension in August. Blockwater was able to repay $645,000 of its debt following the restructuring. But, it has missed another payment few months down the line.
While announcing the loan default in a tweet, TrueFi said,
“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 has been trying its best to follow an out-of-court procedure. It has done so by increasing the borrowing rate and extending maturity. However, seeing that it is not yielding any positive outcome, TrueFi has decided to go the other way.
In an official statement by TrueFi,
“The TrueFi credit group led an exhaustive out-of-court workout with the principals of Blockwater, including a loan amendment to increase the borrowing rate and extend maturity, but ultimately determined a potential court-supervised administrative proceeding would lead to a better outcome for stakeholders given the complexity around the sudden insolvency.”
Blockwater’s payment failure is another example of the insolvency crisis due to the crypto winter. The plummeting of the crypto market was made worse by the collapse of Terra blockchain. This led to the bankruptcy of high-profile crypto firms such as Voyager Digitals and Celsius Network.
TrueFi stated that it has generated over $1.7 billion in unsecured loans. It has also collected about $1.5 billion in repayment from 136 loans. Hence, they have been able to generate $34.34 million in interest for lenders.
The lending platform also announced it would remain in active discussion with Blockwater and its advisors. On the other hand, the credit group will seek ways to maximize recovery for the lenders and stakeholders.
