Crypto market maker Auros defaults on $7.5 million Maple Finance loan payment

Crypto market making firm Auros failed to make a payment on a $7.5 million stablecoin loan from uncollateralized lending platform Maple Finance, according to security and analytics firm PeckShield.

Auros filed for bankruptcy protection in the British Virgin Islands last month after losing access to about $20 million of funds it held on the collapsed crypto exchange FTX. A spokesman for Auros declined to comment on the Maple default.

To date, Auros has defaulted on the required principal repayments on debt worth about $18 million across different Maple-based loans. Previously, Auros also missed repayments after it borrowed 8,400 wrapped ether (WETH) worth $10.8 million, according to The Block Research.

Maple Finance runs as a decentralized protocol that lets firms access loans without collateral. The platform has continued to suffer from contagion risk from the fallout related to the collapse of FTX.

Auros not alone

Auros joins fellow market maker Orthogonal Trading in defaulting on a Maple Finance loan. Just like Auros, Orthogonal had funds frozen on FTX.

“The fallout of FTX has caused an industry-wide credit crunch which has negatively impacted many market participants,” noted Arnold Toh, research analyst at The Block.

Recently, Maple updated its protocol to a second version aimed at opening up the lending platform to a wider range of institutional borrowers, including those from outside the crypto industry. With the new update, called Maple 2.0, the team hopes to reduce the risks by diversifying the quality of borrowers using its platform.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

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