TRUEFI

DESCRIPTION OF EVENTS

"To date, TrueFi has originated over $1.7 billion in unsecured loans and successfully collected approximately $1.5 billion in repayments across 136 loans, generating $34.34 million in interest for lenders."

BlockWater "missing a scheduled payment due on its amended 3,419,190 BUSD loan."

"To date, Blockwater has completed 8 payments totalling $645,405 towards loan repayment. $2,967,458 remains due at the time of the default."

South Korean blockchain investment firm Blockwater Technologies defaulted on a $3.4 million crypto loan from decentralized lending protocol TrueFi on Oct. 6.

Blockwater's default is the latest example of the crypto industry's insolvency crisis as it follows the Terra ecosystem death spiral, the bankruptcy of multiple crypto firms, such as hedge fund Three Arrows Capital (3AC), crypto lender Celsius Network, digital asset broker Voyager Digital, and crypto-mining data center operator Compute North.

Blockwater's default came after TrueFi and Blockwater restructured the loan and extended the payment period in Aug. Blockwater managed to repay $654,000 of its outstanding debt after restructuring but eventually missed payment. The remaining debt amounts to almost $3 million.

TrueFi determined that "a potential court-supervised administrative proceeding would lead to a better outcome for stakeholders given the complexity around the sudden insolvency."

Roshan Dharia, head of lending at ArchBlock, which manages relationships between lenders and borrowers on the TrueFi protocol, said, "While we always prefer to pursue an out-of-court solution with distressed borrowers, in some instances an administrative proceeding is the best option in preserving value for stakeholders."

TrueFi remained in "active discussion" with Blockwater and reaffirmed that Blockwater's insolvency does not affect the protocol's other lending pools.

"TrueFi is pleased to announce the successful restructuring of the Blockwater $3.4mm loan

“The loan amendment extends maturity, results in higher yield for lenders and increases the probability of full repayment” - @RoshanDharia, @TrueFiDAO Head of Lending"

"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."

"As TrueFi continues to pursue renewals with existing borrowers, vet and onboard new borrowers and portfolio managers, and tap new sources of liquidity in both DeFi (such as MakerDAO and FRAX) and traditional markets alike, we believe the protocol remains in a strong position to thrive."

South Korean blockchain investment firm Blockwater Technologies defaulted on a $3.4 million crypto loan from decentralized lending protocol TrueFi on October 6. Prior to default, TrueFi and Blockwater had restructured the loan and extended the payment period in August. Blockwater repaid $654,000 of the debt after restructuring, but subsequently missed a payment, leaving around $3 million unpaid. TrueFi is engaging in active discussions with Blockwater and is confident that the insolvency issue will not affect the protocol's other lending pools. The TrueFi credit group continues to renew loans and explore new sources of liquidity to ensure the protocol's strength and success.

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