Blockchain-based institutional capital exchange Maple Finance announced on Dec. 5 that it plans to cut all ties with Orthogonal Trading due to alleged financial misrepresentation following the FTX collapse.
According to Maple Finance, it is He decided to cut all ties with the business company because it misrepresented its finances over the last four weeks and only recently admitted on December 3 that it could not meet loan payments. This means that the company had been "operating while effectively insolvent", making it impossible for it to continue operating without outside intervention.
Maple Finance shared that it refuses to work with "bad actors" who misrepresent its finances. The company shared:
"A misrepresentation such as this violates Maple's agreements and all appropriate legal avenues to recover funds will be pursued, including arbitration or litigation, as necessary."
While Maple Finance issued a โNotice of Termination of Orthogonal Credit as Pool Delegateโ, severing all ties with the company, it maintains that its smart contract would still be used to protect assets in the Orthogonal Credit pool. Maple said it does not foresee any impact on lenders in the orthogonal credit pool because "all loans remain active with no current signs of distress."
Maple shared that the Orthogonal Credit team, unlike its trading arm, acted with "integrity and professionalism" and is currently seeking strategic solutions "as an independent entity."
Related: Crypto Lender Genesis Allegedly Owes $900M To Gemini Clients: Report
The fallout from the collapse of FTX and Alameda Research seems to continue to ripple through the cryptocurrency community.
On November 9, Orthogonal Credit revealed that shut down Alameda Research's dedicated borrower group at Maple Finance in the second quarter of 2022 after identifying "key weaknesses" in its due diligence.
The company Announced on Twitter that it had identified several critical weaknesses while conducting due diligence earlier this year, specifically, declining asset quality and unclear capital policy, among other factors. The assessment prompted the company to stop lending to Alameda at Maple Finance in May after issuing $288 million in loans in a pool dedicated to Alameda during November 2021 and May 2022.
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