Maple Finance insolvency: Crypto lender warns there may be ‘insufficient cash in pools’

This makes Maple Finance the latest crypto bear market victim as it faces liquidity pressures

Pile of silver and gold coins designed to represent cryptocurrencies including Bitcoin                                 
Maple Finance users now face a longer wait to withdraw deposits – Photo: Getty Images
                                

Crypto lending platform Maple Finance is the latest crypto firm facing liquidity pressures.

The firm explained in a note on its website that “there may be instances where there is insufficient cash in pools, and lenders must wait for borrower repayments”.

The company outlined that lenders must wait for borrowers’ repayments, which will then ideally “increase the available capital in the pools that can then be withdrawn by lenders”.

Maple Finance did state that lenders would “continue to earn interest and rewards during this time”.

Market conditions

Yet again the current crypto bear market is being blamed for driving the situation. The lead crypto Bitcoin (BTC) was trading earlier today at $20,873, while Ethereum (ETH) was at $1,150, according to CoinMarketCap.

The collapse of the stablecoin TerraUSD (UST) and its sister token Terra (LUNA) in May have also added to the crypto market’s financial issues.

10-day cooldown period

Usually, Maple Finance has a 10-day cooldown period and then lenders have a 48 hour “withdrawal window” during which they can withdraw their deposit.

If a pool has insufficient total cash available to make the withdrawal, then the lender must wait another 10-day cool-down period before trying again.

If there is enough total cash available, the lender can withdraw their balance within the 48-hour “withdrawal window”.   

Cash pool delegates, Maple Finance stated, are “actively working to service all withdrawal requests”.

FTX bails out Voyager and BlockFi

Recently, cryptocurrency derivatives exchange FTX signed deals to bail out both BlockFi, the crypto bank, and Voyager Digital, the US-based cryptocurrency platform.

Voyager Digital Holdings, a subsidiary of Voyager Digital, announced it has entered into an agreement with Alameda Ventures, FTX CEO’s quantitative research firm, and received $200m (£163m) in cash and USD Coin (USDC). Alameda also injected 15,000 BTC worth $300m (£244m) into Voyager.

As well as providing financial assistance to BlockFi with an injection of $250m (£203m), FTX is also partnering with the crypto bank.

Again, the crypto bear market was blamed for the main reason why these crypto firms are facing financial difficulty.

Further reading

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