October 3, 2022

The Celsius Network logo and representations of cryptocurrency are shown in this illustration taken on June 13, 2022. REUTERS / Dado Ruvic / Illustration

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July 6 (Reuters) – Cryptocurrency lenders, which have thrived during the COVID-19 pandemic, have struggled recently due to the downturn caused by the collapse of a major coin in May and a global sense of risk-off.

Here are some companies that have had problems recently:

Terraform factor

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The South Korean-based company, which is behind the dollar-pegged stablecoin TerraUSD and its token Luna, plummeted in May, triggering a selloff and triggering a chain reaction. Read more

The company’s co-founder, Do Kwon, announced in May a “recovery plan,” with additional external funding and the rebuilding of TerraUSD so that it would be backed by reserves rather than relying on an algorithm to maintain a 1:1 peg to the dollar. Read more

An official at South Korea’s top prosecutor’s office said on June 21 that many Terraform employees have been placed on a no-fly list and cannot leave the country. Read more

Voyager Digital (VOYG.TO)

The US-based cryptocurrency bank said on July 6 that it has filed for bankruptcy. Read more

In its Chapter 11 bankruptcy filing, Voyager estimated it had more than 100,000 creditors and assets worth between $1 billion and $10 billion, and liabilities of equal value.

Three Arrows Capital (3AC)

A Singapore-based cryptocurrency hedge fund went into liquidation on June 29, two days after receiving a default notice from lender Voyager for failing to make payments on a crypto loan of more than $650 million. Read more

According to a court filing on July 1, the company was seeking protection from creditors under Chapter 15 of the US Bankruptcy Code, which allows foreign debtors to protect US assets. Read more

percentage grid

The lender has frozen withdrawal and transfer services, citing “extreme” market conditions, and has hired advisors over a possible bankruptcy filing. Read more

Calcalist reported that the American-Israeli company said on July 4 that it had laid off a quarter of its workforce.

fold

The Singapore-based company said on July 4 that it had suspended withdrawals for more than 800,000 customers. In a blog post, Fuld said he is facing “financial challenges” due to volatile market conditions.

“The financial difficulties of our major trading partners inevitably affect us,” the company said, adding that customers have withdrawn about $200 million since June 12. read more

Babel Finance

The Hong Kong-based cryptocurrency lender said it has temporarily halted withdrawals and redemptions of crypto assets on June 17, as the company seeks to pay its customers. Read more

“Due to the current situation, Babel Finance is facing extraordinary liquidity pressures,” the company said, noting the high volatility in the cryptocurrency market.

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Written by Dina Cartette. Edited by Magu Samuel

Our criteria: Thomson Reuters Trust Principles.

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