• FTX bankruptcy affects more and more companies
• Orthogonal Trading also insolvent
• Sherlock’s staking pool suffers a significant loss
Since the beginning of November, the collapse of the crypto exchange FTX and its sister company Alameda Research has been the main topic in the crypto community. Since FTX was one of the largest crypto exchanges in the world, its bankruptcy has severely shaken the entire crypto market and, like the domino effect, caused other companies to struggle as well.
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Orthogonal Trading and Maple Finance affected
Also caught up in the downward spiral was Orthogonal Trading, which, according to Cointelegraph, admitted on December 3 that it could not make loan repayments after the collapse of FTX and Alameda. As a result, the blockchain-based institutional capital marketplace Maple Finance severed all ties to Orthogonal Trading two days later.
Maple Finance is a lending platform for unsecured loans. Maple thus enables institutional investors such as market makers or venture capital investors to take out loans that do not have to be 100 percent covered by other assets. If an investor is deemed creditworthy by the Maple Finance community, anyone can participate in funding the loan using Ethereum (ETH) or USD Coin (USDC). However, Maple lenders must note that principal deposited into any of the loan pools is subject to a 90-day hold period during which the principal may not be withdrawn.
Sherlock suffers significant casualties
Now it has become known that the effects of the FTX bankruptcy have also affected Sherlock. As per a blog post, the crypto audit platform expects a loss of around $4 million from troubled loans on Maple Finance. According to the company, on August 31st, a total of five million USDC from its staking pool with a total volume of twelve million dollars was paid into a Maple pool, which has now been badly affected by the insolvencies of Orthogonal Trading and FTX.
After the collapse of FTX, Sherlock wanted to take the capital out of the Maple loan pool, but was unable to do so right away because the 90-day lockup period that applies to new deposits had not yet expired. According to Sherlock, after this deadline at the end of November, the repayment had been initiated and was in the middle of a ten-day waiting period when Orthogonal Trading also became insolvent.
According to the crypto audit platform, Sherlock stakers are expected to incur a loss of $3.75 million to $4 million in this regard because 20 to 25 percent of the $5 million investment may not be recovered . This brings losses to around a third of the entire Sherlock staking pool. “Unfortunately, Sherlock is not in the financial position to compensate stakers for this loss if Sherlock is to continue in business,” the company’s blog said.
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