Auros Global Defaults On 2,400 wETH Loan After FTX Contagion
Auros Global, an algorithmic crypto trading platform, is among the crypto entities suffering from the collapse of FTX. The platform has missed the principal repayment on a loan of 2,400 wETH (Wrapped Ether).
M11 Credit, an institutional credit underwriter owned by Maple Finance, announced the news on its Twitter account earlier in the week. In the tweet, M11 Credit revealed that Auros had failed to make a principal payment on its 2,400 wETH loan.
According to M11 Credit, the loan has a total value of almost $3 million. Also, the institutional credit underwriter stated that it maintains close and constant communication with borrowers.
Presently, the institute has decided to reach out to serval firms after the recent FTX saga. M11 Credit stated that Auros was witnessing a short liquidity crisis due to the insolvency of FTX.
Meanwhile, the algorithmic trading platform is yet to respond to M11 Credit’s statement. However, Maple Finance retweeted M11 Credit’s tweet.
M11 Credit noted that Auros has not defaulted on the loan due to the missed principal payment. Instead, the exchange’s missed payment means it has five days to pay the principal according to the smart contracts.
Hence, Auros has till December 5th to make a late payment. If the company fails to make a late payment before December 6th, it is said to have defaulted on its loan.
What Happens If Auros Global Defaults On Its Loan?
Meanwhile, a video published on the official Maple Finance channel on YouTube throws more light on the consequences of a loan default. If a borrower defaults on a loan, this might lead to liquidating its collateral, such as USDC and staked maple tokens.
These assets will be liquidated and used to satisfy any deficits owed to lenders. Also, legal action might be taken to enforce the terms of the agreement through New York courts.
Furthermore, M11 Credit asserted that it is “negotiating with Auros Global.” The aim is to create a press statement that offers additional info to lenders.
Following FTX’s collapse, some firms exposed to the crypto exchange lost their investments. The resulting contagion spread across the crypto industry to various firms.
BlockFi is a notable crypto company that FTX’s bankruptcy affected and made it declare bankruptcy. Also, Sequoia, New Huo Technology, Genesis Trading, and Galois Capital lost millions after FTX went under.
Additionally, Nestcoin, an African Web3 startup firm, had investments in FTX. Following FTX’s bankruptcy, Nestcoin laid off several workers a few days after FTX’s bankruptcy filing.
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