TrueFi Announces First Default over its $3.4 million BUSD loan

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Ear­li­er today, Octo­ber 10, decen­tral­ized finance (DeFi) lend­ing plat­form True­Fi issued a notice of default to Block­wa­ter Tech­nolo­gies on miss­ing a sched­uled pay­ment over its $3.4 mil­lion BUSD loan. Over the last week, the True­Fi cred­it group was try­ing to work out an out-of-court set­tle­ment. This includ­ed increas­ing the bor­row­ing rate and extend­ing maturity.

How­ev­er, they found out that a court-super­vised admin­is­tra­tive pro­ceed­ing could lead to a bet­ter out­come for stake­hold­ers. This is TrueFi’s first and only declared cred­it default to date. The cred­it group said that it con­tin­ues to remain vig­i­lant as well as proac­tive in cur­rent macro conditions.

Lend­ing plat­forms have been fac­ing the heat of the cryp­to mar­ket melt­down this year. Mas­sive with­drawals in Q2 have led to the col­lapse of giants like Cel­sius Net­works and Voy­ager Digital.

True­Fi said that it will con­tin­ue to remain in active dis­cus­sions with the asso­ciates of Block­wa­ter Tech­nolo­gies. The focus will be on max­i­miz­ing recov­ery for the stake­hold­ers and lenders. The offi­cial announce­ment from True­Fi notes:

Block­wa­ter has com­plet­ed 8 pay­ments totalling $645,405 towards loan repay­ment. $2,967,458 remains due at the time of the default. The Block­wa­ter default does not affect lenders in TrueFi’s USDC, TUSD, USDT sta­ble­coin lend­ing pools, nor any of TrueFi’s cap­i­tal mar­ket portfolios.

Unsecured Loans By TrueFi

True­Fi said that it had orig­i­nat­ed $1.7 bil­lion in unse­cured loans. How­ev­er, they have suc­cess­ful­ly col­lect­ed $1.5 bil­lion in repay­ments in all of its 136 loans out­stand­ing. Its loans gen­er­ate $34.36 mil­lion in loans for the lenders.

The True­Fi group said that its loan book is stand­ing strong and they have been active­ly pur­su­ing loan renewals. Fur­ther­more, they also offer lenders cer­tain pro­tec­tions against default in the name of True­Fi SAFU. The True­FiSA­FU over­sees a fund explic­it­ly ded­i­cat­ed to assist­ing lenders affect­ed by defaults.

The also pro­vide staked TRU slash­ing “which may appro­pri­ate up to 10% of staked TRU for the ben­e­fit of lenders affect­ed by a default, under the direc­tion of the DAO”.

Bhushan is a Fin­Tech enthu­si­ast and holds a good flair in under­stand­ing finan­cial mar­kets. His inter­est in eco­nom­ics and finance draw his atten­tion towards the new emerg­ing Blockchain Tech­nol­o­gy and Cryp­tocur­ren­cy mar­kets. He is con­tin­u­ous­ly in a learn­ing process and keeps him­self moti­vat­ed by shar­ing his acquired knowl­edge. In free time he reads thriller fic­tions nov­els and some­times explore his culi­nary skills. 

The pre­sent­ed con­tent may include the per­son­al opin­ion of the author and is sub­ject to mar­ket con­di­tion. Do your mar­ket research before invest­ing in cryp­tocur­ren­cies. The author or the pub­li­ca­tion does not hold any respon­si­bil­i­ty for your per­son­al finan­cial loss.

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