A leading South Korea-based crypto investment firm, Blockwater, has been dragged by TrueFi, which is a decentralized lending protocol over defaulting to repay a loan of $3.4 million as per a report.
TrueFi has issued a notice of default to the crypto firm urging it to act swiftly on its responsibility in order to prevent being litigated in court.
The lending protocol maintains that the borrowed funds should be repaid in Binance USD (BUSD) stablecoin as initially agreed upon.
There is no mincing word that Blockwater’s default is the latest scenario in the crypto industry, which has often been adduced to insolvency crisis hitting the crypto space. It is believed that the inability of the crypto firm to meet up financial obligations is due to the downturn in the crypto market.
Recall that the outrageous collapse of Terra blockchain spearheaded the crypto bear markets with a series of high-ranked cryptocurrency firms going bankrupt. Hedge fund groups also affected by the circumstance include Three Arrows Capital (3AC), digital asset broker Voyager Digital, and crypto lender Celsius Network, among others.
Earlier, TrueFi announced the restructuring of the loan with Blockwater in order to give the crypto firm ample time to repay. This led to the extension of the payment date to August but the agreed timeframe has also been breached.
While Blackwater struggled to pay $654,000 after the restructuring program, there are still outstanding debts running to the tune of $3 million.
TrueFi has asserted that the case would soon be administered and monitored by the court if there is no positive response from the Blockwater crypto firm. Although the lending protocol expresses its desire for an out-of-court settlement but might be left with no option.
Rise of Crypto Investment Firms
Despite the bear market, there is an increase in the number of crypto investment firms and activities. One of the leading Swiss Crypto ETP firms, 21Shares, launched two new exchange-traded products (ETP) thereby giving investors exposure to the largest cryptocurrencies – Bitcoin and Ethereum.
The platform has experienced a surge in inflow with funds hitting $100 billion in new assets under management (AUM) year-to-date.
Meanwhile, the World Economic Forum (WEF) old guard has warned cryptocurrency firms to always clean up their act to enjoy wider acceptance.
