After failing to make a principal payment on a 2,400 Wrapped Ether (wETH) decentralized finance (DeFi) loan, cryptocurrency trading company Auros Global appears to be affected by the FTX contagion.
The Auros missed a principal payment on the 2,400 wETH loan, which is worth a total of about $3 million, according to institutional credit underwriter M11 Credit, which oversees liquidity pools on Maple Finance. This information was shared with followers of M11 Credit in a Twitter thread on November 30.
According to M11 Credit, which claims to be in constant contact with its borrowers—especially in light of recent events—Auros is dealing with a “short-term liquidity issue as a result of the FTX insolvency.”
Our top priority is to limit the risk for our lenders. We will continue our liaison with the Auros team in regard to all their open loans from our pools.
— M11 Credit (@M11Credit) November 30, 2022
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Although Auros, an algorithmic trading and market-making company, has not yet commented on the claim made by M11 Credit, Maple Finance has retweeted the thread.
M11 Credit has emphasized that just when a payment was missed, that doesn’t indicate the loan is in default. Instead, the “5-day grace period as per the smart contracts” has been triggered by the missed payment.
According to this, Auros has until December 5 to make the late payment before being deemed in default.
A default might cause the borrower’s collateral to be sold off, and/or staked maple tokens and USDC on the platform could be utilized to make up any shortages to lenders, according to an official Maple Finance YouTube video. The New York courts may also be used to take enforcement action.
“Working with Auros to provide a joint statement that provides additional information to lenders,” according to M11 Credit, is what they claim to be doing.
M11 Credit and Auros have both been contacted by Cointelegraph for comment, but no response has been received as of the time of publication.
Trading platform On November 11, FTX declared that company would file for bankruptcy due to a liquidity situation that left it unable to honor withdrawal requests. The ensuing epidemic has affected many more businesses. On November 28, BlockFi declared bankruptcy.
Due to its exposure to the failing exchange, Nestcoin had to fire employees in addition to losing millions of dollars as a result of FTX’s demise.
