Collapsed cryptocurrency hedge fund Invictus Capital has failed to repay a loan from decentralized lending protocol TrueFi, according to TrueFi. Loan data dashboard.
The company failed to repay a $1 million loan denominated in Binance USD (BUSDIt was a stablecoin with a maturity date of October 30th. The debt was unsecured. In other words, Invictus did not commit any assets to it and secured the loan due to its reputation and good financial standing at the time.
True Fi A Twitter post warned investors In early October, Invictus confirmed that it may not be able to repay the loan. New World Holdings, the Cayman Islands-based parent company of Invictus, voluntary liquidation After being hit by a crypto rout started by billions of dollars Once-top blockchain project Terra implodes. Invictus reportedly Moved investor funds to Terra’s bankrupt stablecoin USTC And went to crypto lender Celsius Network bankruptcy in July.
TrueFi has not yet issued a “notice of default” to Invictus. According to TrueFi’s dashboard, Invictus has defaulted on its latest loan from 2020 to 2021. With TrueFi, he owed $28.8 million and paid it back with interest.
“Invictus’ default once again demonstrates the vulnerability of trust-based unsecured lending,” Walter Teng, vice president of digital asset strategy at research group Fundstrat, told CoinDesk.
This is the second unsecured loan to default on TrueFi within a month, following South Korea-based Blockwater’s loan. inability to repay $3 million debt on the platform.Another decentralized lending protocol, Maple Finance, was announced in June by crypto lender Babel Finance. insolvency Delinquent on a loan of $10 million. The default cost investors $7.9 million in losses for him.Maple Decides to Tighten Lending Standards, Bloomberg report last month.
These defaults amid the ongoing shakeout among struggling crypto companies Risks and challenges of incorporating unsecured lending – Widespread in traditional markets – To decentralized finance in new and volatile digital asset markets.
CoinDesk reached out to TrueFi and Alvarez & Marsal, who represent New World Holding in the court-assisted liquidation, for comment.