South Korean investment blockchain company Blockwater Technologies has defaulted on a loan. On October 6, representatives of the lender TrueFi issued a notice of default after Blockwater failed to make a payment on a loan of $3.4 million in the BUSD stablecoin.
The default of Blockwater clearly demonstrates the crisis of insolvency of the crypto industry. The noticeable decline of the crypto markets in 2022, exacerbated by the Terra blockchain exploit, led to the bankruptcy of many well-known crypto companies, such as: hedge fund Three Arrows Capital, crypto lender Celsius Network, digital asset broker Voyager Digital and the operator of the crypto mining data center Compute North.
The default of Blockwater Technologies occurred after the restructuring of the loan and the extension of the payment period for it from August to October. Blockwater managed to pay $654 thousand of outstanding debt after an attempt at restructuring, but in the end the payment for a large amount was missed. The balance of Blockwater’s debt to TrueFi debt is almost $3 million.
As a result, TrueFi abandoned further restructuring efforts and decided to conduct administrative proceedings under the supervision of the court. TrueFi also announced the continuation of the dialogue with representatives of Blockwater Technologies and that Blockwater’s insolvency will not affect other credit pools of the protocol in any way.