South Korean decentralized cryptocurrency financing corporation Blockwater Technologies has neglected payment on an allowance from distributed credit document TrueFi.
This was stated by TrueFi itself in its report disclosed this Sunday. Following the course of their statement, TrueFi directed a notice of delinquency to Brockwater on the first of October. This took place after it failed its obligations and was unable to pay back the loan of $3.4 million that it received from Binance crypto-lender.
Blockwater’s nonpayment situation appears to be the most recent example of a bankruptcy crisis in the cryptocurrency finance market. The crypto industry’s downturn this year, exasperated by the Terra blockchain crash, has funded the speculator Three Arrows Capital, a Network C crypto banking company. It owns several large companies, including electronic assets agent Voyager.
This led to the bankruptcy of the crypto company Blockwater. With the current situation, such consequences were completely inevitable.
The situation in detials
Blockwater’s inability to repay its loan occurred after TrueFi and Blockwater restructurisation of funding and increased payment terms recently in August. After Blockwater’s restructuring, he paid off $654,000 in superior debt, but ultimately this led to the default of the corporation and its overall bankruptcy.
The amount of debt that has to be repaid is around $3 million (this information was stated in the TrueFi report). The situation will definitely have drastic consequences, such as bankruptcy statement procedure, administrative work and regulations, which may include court investigation of the case. As an outcome, all parties will have to be involved.
The consequences and investigations
The head of loan department at ArchBlock, Roshan Darya, who administers the relationship between moneylenders and mortgagors disclosed to his CoinDesk, that there is still an option to terminate the TrueFi documentation. In a statement, TrueFi said it was undergoing active negotiation with Blockwater and that Blockwater’s bankruptcy would not affect the procedure of other loans’ execution.
Such situations have already taken place with many cryptocurrency lenders. Several of them have already gone bankrupt due to the recession of the market in general and new governmental measures on crypto-market regulation. So the future of cryptocurrency bankers remains unclear at sight of the current situation.