Decentralized finance (DeFi) unsecured loan protocol TrueFi is trying to claw back funds from its debtors and recently issued a default notice to Blockwater.

On Oct. 10, the DeFi lending firm announced that it had issued a notice of default to Korea-based Blockwater Technologies for missing a payment on a large stablecoin loan.

Blockwater, a crypto and blockchain investment firm, has become the latest victim of the crypto contagion that has already swallowed up the likes of Voyager Digital, Celsius, and Three Arrows Capital this year.

According to the notice, Blockwater has failed to make its latest payment on a loan of $3.42 million in Binance USD (BUSD).

TrueFi $BUSD Pool Update:

TrueFi issued a notice of default to Blockwater for non-payment on its $3.4m restructured loan

NWH/Invictus entered a Cayman voluntary liquidation proceeding and may not repay its $1.0m loan due 10/30

Bastion has repaid its $10m loan due 10/4 in full

TrueFi and Blockwater restructured the loan and extended the payment period in August, and the investment firm made 8 payments totaling $645,405 following the restructuring. However, the amount due at the time of the default remains at $2.96 million.

TrueFi stated that this was the only declared default to date, and it “does not affect lenders in TrueFi’s USDC, TUSD, USDT stablecoin lending pools, nor any of TrueFi’s capital market portfolios.”

Company representatives said that TrueFi prefers out-of-court solutions for distressed borrowers but sought an administrative proceeding in this case as the best option for preserving value for stakeholders.

TrueFi claims to have originated over $1.7 billion in unsecured loans to date and successfully collected around $1.5 billion in repayments across 136 loans. The Blockwater default represents around 2% of its total value outstanding, it stated.

It also reported facilitating almost $140 million in active lending across 10 loans at the moment, reassuring investors by adding:

“The TrueFi credit group believes that the loan book continues to remain in strong standing and has been actively pursuing loan renewals given continuing borrower demand and support from major lenders.”

According to the TrueFi app, Wintermute Trading still has an outstanding loan of $92 million USDT and the next payment is due on Oct. 15. London-based Wintermute was exploited for $160 million last month, and theories have emerged about it being an inside job. Therefore, it’s possible that TrueFi may have to issue another default notice in the next few days, which may compound its problems.

There are several other active loans with TrueFi which are due for payment this month, including 3.5 million USDC with MGNR Holdings, the same amount with proprietary trading firm Nibbio, 3.3 million USDC with Auros, and 5 million USDC with Folkvang, a quantitative trading firm and crypto liquidity provider.

The post TrueFi Issues Default Notice to Blockwater for $3.4M BUSD Loan appeared first on BeInCrypto.

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