Some crypto lenders platforms had to take extreme caution amid the crypto market crash and put some measures in place, like freezing trades and withdr
Some crypto lenders platforms had to take extreme caution amid the crypto market crash and put some measures in place, like freezing trades and withdrawals.
During the Covid-19 pandemic, crypto lenders that boomed have now found themselves in a tight corner due to the recent slide of a major token back in May and also a general crypto market crash.
We have compiled a list of some of these firms that have recently run into difficulties.
- Three Arrow Capital (3AC)
- Celsius Network
- Voyager Digital
- Terraform Labs
- Babel Finance
Three Arrow Capital (3AC)
It is no longer news that the Singapore-based crypto hedge fund has been in the news since June 29th when they entered liquidation, a day after receiving a notice of default from a crypto broker and lender Voyager Digital after failing to refund crypto loan of about more than $650 million.
The company was seeking protection under the U.S. bankruptcy code’s Chapter 15 from creditors. The code allows foreign debtors to shield U.S. assets.
The company which is headquartered in Hoboken, New Jersey froze its transfer and withdrawal services giving reasons as “extreme” market conditions. They have also hired advisers which shows possible bankruptcy filing.
The company announced on July 4th that it has laid off a quarter of its workforce as reported by Calcalist.
Related: Crypto Lending and How it works
One of the lenders who have made headlines recently is Voyager Digital. On July 6th, the company filed for bankruptcy following the current crypto market crash. This comes following the suspension of withdrawals, trading, and deposits on its platform.
In the filing, Voyager disclosed that it has over 100,000 creditors and has between $1 billion and $10 billion in assets, and liabilities.
The Singapore-based company founded by Darshan Bathija and Sanju Sony Kurian suspended withdrawals on July 4 for its large base of over 800,000 customers.
They said in a blog post, that the company is facing “financial challenges,” attributing it to the current market volatility. The company made it known that its customers have withdrawn over $200 million since June.
“The financial difficulties of our key business partners inevitably affect us,” they added.
Their competitor Nexo, has also offered to buy the embattled company as reported by CNBC.
The South Korea-based company ignited a chain reaction when its dollar-pegged stablecoin TerraUSD and its paired token Luna went plunging in May.
A recovery plan was announced in May by the company’s co-founder, Do Kwon with extra funding and rebuilding of the stablecoin TerraUSD so that instead of it to rely on an algorithm to maintain its 1:1 dollar peg, it will be backed by reserves instead.
The Hong Kong-based company has announced that it has temporarily suspended its withdrawal of crypto assets on June 17 while they struggle to pay its clients.
The company highlighted the high volatility of the crypto market and said they are facing unusual liquidity pressure.
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