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Crypto lending platforms had to turn to extreme measures in some cases, such as frozen trading
Crypto lenders, who are on the rise during the COVID-19 violence, have been embroiled in controversy recently due to a collapse brought on by a major token collapse in May and a global sense of security.
Below are some of the companies that have been in trouble recently:
The South Korean company, behind the stablecoin dollar-pegged TerraUSD and its token Luna, dropped in May, went on sale and sparked a chain reaction.
The company’s founder, Do Kwon, announced in May a “return plan”, with additional foreign funding and the restructuring of TerraUSD to be backed up by archives rather than relying on its $ 1: 1 peg retention algorithm.
An official at the South Korean Prosecutor General’s Office said on June 21 that many Terraform workers had been added to the list of migrants and could not leave the country.
An American crypto lender said on July 6 that he had filed for bankruptcy.
In completing its Chapter 11 dissolution document, Voyager estimated that it has more than 100,000 debtors and somewhere between $ 1 billion and $ 10 billion in assets, as well as debts of the same value.
Three Arrows Capital (3AC)
The Singapore-based crypto hedge fund came to an end on June 29, two days after receiving a notice of non-payment from Voyager creditors for failing to repay a $ 650 million crypto loan.
According to a July 1 court report, the company was seeking protection from debtors under Chapter 15 of the U.S. bankruptcy code, which allows foreign debtors to protect U.S. assets.
The lending company has suspended its withdrawal and transfer services, citing “extremely extreme” market conditions, and employs advisers about potential file losses.
On July 4, an American and Israeli company said it had suspended a quarter of its employees, reports Calcalist.
The Singapore-based company said on July 4 that it had stopped withdrawing from its more than 800,000 customers. In a blog post, Vauld said he was facing “financial challenges” due to volatile market conditions.
“The financial problems of our key business partners are definitely affecting us,” the company said, adding that customers have withdrawn an estimated $ 200 million from June 12th.
A Hong Kong crypto lender said it had temporarily suspended the withdrawal and redemption of crypto assets on June 17, as the company strives to pay its customers.
“Given the current situation, Babel Finance is facing extraordinary pressures of liquidity,” the company said, highlighting the huge volatility of the digital currency market.