Cryptocurrency firm Auros Global misses DeFi payment, thanks to FTX

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Cryptocurrency trading firm Auros Global has missed a loan repayment of 2,400 Wrapped Ether (wETH) worth $3 million. The update was shared by the institutional credit underwriter M11 Credit which manages liquidity pools on Maple Finance.

According to M11 Credit, Auros is experiencing a short-term liquidity issue as a result of FTX’s insolvency. M11 Credit also stated that it is in close contact with its borrowers, particularly in light of recent events.

With the announcement of FTX’s bankruptcy filing on 11 November, a number of crypto and blockchain companies have filed for bankruptcy or are about to do so.

FTX debacle leads to crypto crisis

Furthermore, crypto lending firm BlockFi declared bankruptcy on 28 November. Galois Capital and New Huo Technology have also lost millions of dollars from FTX’s collapse.

Crypto mining firm Compute North filed for Chapter 11 bankruptcy on 22 September with almost $500 million in liabilities. Another mining firm Core Scientific’s filing with the Securities Exchange and Commission (SEC) last month revealed that the Texas-based mining company may run out of cash before the end of 2022.

5-day grace period for Auros Global

As per the smart contracts, Auros Global has a 5-day grace period to repay its loan. If it does not make the loan payment by 5 December, it will be declared in default.

In the event of a default, the borrower’s collateral could be liquidated and/or staked maple tokens and USDC on the platform used to cover any shortfalls to lenders. New York courts could also be used to pursue enforcement action.

On 27 November, only three days before M11’s announcement about Auros’ short-term liquidity problems, the trading firm borrowed 2,000 wETH ($2.6 million) with a 14-day maturity. Auros owes M11’s wETH credit pool on Maple an aggregate of 8,400 wETH ($10.7 million).

It should, however, be noted that an algorithmic trading and market-making firm, Auros has not yet addressed the statement by M11 Credit.

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