Close Menu
    X (Twitter)
    Blockchain Journal
    • News
      • Blockchain News
      • Bitcoin News
      • Ethereum News
      • NFT
      • DeFi News
      • Polkadot News
      • Chainlink News
      • Ripple News
      • Cardano News
      • EOS News
      • Litecoin News
      • Monero News
      • Stellar News
      • Tron News
      • Press Releases
      • Opinion
      • Sponsored
    • Price Analisys
    • Learn Crypto
    • Contact
    • bandera
    Facebook X (Twitter) Instagram
    Blockchain Journal
    Home » Market Situation Puts Crypto Lenders on the Ropes

    Market Situation Puts Crypto Lenders on the Ropes

    0
    By hassan on July 7, 2022 Companies, News
    market situation puts crypto lenders on the ropes
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Crypto lending, a service that boomed during the 2020-2021 years, especially during the COVID-19 pandemic, has recently faced huge difficulties.

    While various lenders rose during the pandemic, many users enjoyed borrowing crypto with no collateral or with crypto collateral. 

    Due to the ongoing harshest crypto winter, various crypto startups have announced bankruptcy, while many others are laying off their workers just to minimize their loss. The fall of the Terra/LUNA coin caused a serious downfall of other token prices in the crypto space, causing a global risk-off sentiment. However, crypto lenders suffered major losses with huge debts on their portfolios waiting to be paid. Many crypto lenders have closed down services, while others have announced bankruptcy. 

    After weeks of plummeting cryptocurrency prices, Coinbase said that it was cutting 18 percent of its employees after layoffs at other crypto companies like Gemini, BlockFi and Crypto.com. High-profile startups like Terraform Labs have imploded, wiping away years of investments while an experimental crypto bank, Celsius, also abruptly halted withdrawals.

    market situation puts crypto lenders on the ropes

    The crypto ecosystem’s pullback illustrates the precarious structure built around these risky and unregulated digital assets. The total value of the cryptocurrency market has dropped by about 65 percent since autumn, and analysts predict the sell-off will continue. Stock prices of crypto companies have cratered, retail traders are fleeing, and industry executives are predicting a prolonged slump that could jeopardize more companies.

    Crypto Lenders and other Crypto Startups are dying. 

    Terraform Labs 

    Being the company that ignited the downturn of the crypto space, The South Korea-based company, which is behind the dollar-pegged Stablecoin TerraUSD and its paired token Luna, has plunged in value in May, sparking sell-offs. It announced that it had filed for Chapter 15 bankruptcy. 

    The company’s co-founder, Do Kwon, announced in May a “recovery plan,” with additional outside funding and rebuilding of TerraUSD so that it is backed by reserves rather than relying on an algorithm to maintain its 1:1 dollar peg.

    Voyager Digital (VOYG.TO)

    The U.S.-based crypto lender said on July 6 that it had filed for Chapter 11 bankruptcy. In its Chapter 11 bankruptcy filing, Voyager estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in assets and liabilities worth the same value. 

    Three Arrows Capital (3AC)

    The Singapore-based crypto hedge fund entered liquidation on June 29, two days after receiving a notice of default from lender Voyager for failing to make payments on a crypto loan of more than $650 million.

    According to a court filing on July 1, the company sought protection from creditors under the U.S. bankruptcy code’s Chapter 15, which allows foreign debtors to shield U.S. assets.

    Celsius Network

    The lending company froze its withdrawal and transfer services, citing “extreme” market conditions, and has hired advisers for a possible bankruptcy filing. On July 4, the American-Israeli company said it had laid off a quarter of its workforce.

    Vauld

    The Singapore-based company said on July 4 that it had suspended withdrawals for its more than 800,000 customers. In a blog post, Vauld said it was facing “financial challenges’‘ due to volatile market conditions. “The financial difficulties of our key business partners inevitably affect us,” the company said, adding that customers had withdrawn around $200 million since June 12.

    blockchain BTC Business Crypto market cryptocurrency Featured Investment lender Network Work
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    hassan
    • LinkedIn

    Related Posts

    Hyperliquid’s USDH stablecoin call sparks fairness and governance debate

    September 5, 20253 Mins Read

    SharpLink to explore staking part of its $3.6 billion ETH treasury on Linea

    September 5, 20253 Mins Read

    Strategy Inc.’s path to the S&P 500 faces committee discretion, extreme volatility, and Bitcoin-dependent results

    September 5, 20253 Mins Read

    Coinbase accelerates toward a majority of AI-generated code amid a global trend

    September 5, 20253 Mins Read

    World Liberty Financial Blocks Justin Sun’s Wallet Amid WLFI Controversy

    September 5, 20253 Mins Read

    SEC bets on a pro-crypto agenda with a series of rulemakings on digital assets

    September 5, 20252 Mins Read

    Subscribe to Updates

    Get the latest creative news from FooBar about art, design and business.

    © 2025 Blockchain Journal

    Type above and press Enter to search. Press Esc to cancel.

    We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.