Crypto Markets Today: FTX Fallout Hits Maple Finance; Bitcoin Declines

The action came after Orthogonal was due to pay back a $10 million USDC stablecoin loan from a credit pool managed by M11 Credit on Dec. 4. Orthogonal has been a significant borrower on Maple, and also was a manager and underwriter of a credit pool on Maple.

M11 Credit has issued a notice of default to Orthogonal for all active loans outstanding on Maple’s USDC stablecoin pool, with $31 million of current liabilities in four loans.

The default notice also extends to Orthogonal’s wrapped ether (wETH) loans worth $5 million (3,900 wETH) from Maple’s another M11 Credit-managed lending facility, M11 Credit confirmed to CoinDesk.

Maple said in a statement that Orthogonal has been “operating while effectively insolvent,” and didn’t communicate that it would be unable to service the debt.

A default by Orthogonal could deal another blow to undercollateralized lending protocols grappling with liquidity crunch, and the fallout from crypto exchange FTX’s implosion.

Orthogonal’s default marks the second time a borrower defaulted on Maple after Babel Finance‘s failure to service its debt in June. Earlier this fall, crypto firms Blockwater and Invictus Capital defaulted on their loans on rival unsecured lending protocol TrueFi.

Bitcoin (BTC) and ether (ETH): The top currency by market cap slid roughly 0.8% to $16,940after holding above the $17,000 level earlier in the day. It traded as high as $17,412 in the past 24 hours before falling. Bitcoin traded at a significant discount to its 200-day average. Ether followed a similar pattern, trading down 1.8% to $1,250. Traditional markets seem to have re-embraced riskier assets, at least temporarily.

Crypto.com‘s CRO: The token was gaining in value Monday following news that the exchange is teaming up with Coca-Cola to launch a series of non-fungible tokens (NFT) celebrating the 2022 FIFA World Cup in Qatar. CRO climbed as much as 10% after the press release hit, and though it slipped to a 4% advance at the time of publication, CRO remains one of the day’s top performing digital assets.

Equities: Major indexes turned red on Monday. The S&P 500 and Nasdaq Composite closed down 1.79% and 1.93%, respectively, while the Dow Jones Industrial Average sank 1.4%. The downturn came after a higher-than-expected Institute for Supply Management November services raised investor concerns about the Federal Reserve’s plan to raise interest rates in December.