ByBit joins crypto exchanges offering crypto lending services

May 2, 2023 Coin Telegraph

Bybit

Dubai-based cryptocurrency exchange ByBit rolls out cryptocurrency lending service, joining a handful of major exchanges that offer interest-bearing lending facilities.

Cryptocurrency exchange ByBit is the latest major platform to roll out an in-house cryptocurrency lending service for users.

The Dubai-based exchange announced the launch of the service on May 2, delivering interest payouts to users that deposit cryptocurrency through the platform's new offering. The service is touted to payout hourly interest payments from lending pools, while lenders can deposit and redeem loaned cryptocurrency tokens without lock-up periods.

Meanwhile, borrowers on ByBit’s exchange can take out loans to tap into funds for a variety of trading options on the platform. Borrowers must post an equal or greater amount of collateral assets in relation to the loaned amount to safeguard lenders’ investments.

A statement from ByBit CEO and co-founder Ben Zhou outlined the crypto exchange's intent to offer users a means to generate returns while advanced traders can access capital from lenders for more advanced trading options on the exchange.

ByBit is the latest major cryptocurrency exchange to offer a cryptocurrency lending service. Binance offers a handful of services that allow users to earn interest on deposited cryptocurrency assets.

KuCoin is another top five cryptocurrency exchange by trading volume that offers a lending service on a wide variety of tokens. OKX offers users a loan facility which enables users to borrow funds on deposited tokens, but it does not facilitate user lending on its exchange platform.

American cryptocurrency exchange Coinbase abandoned plans to launch its own Lend service in Sept. 2021, following a stern warning from the United States Securities and Exchange Commission. The U.S. regulator had deemed the offering a security, with Lend promising returns of 4% per annum on USD Coin (USDC) deposits.

Kraken fell foul of overstepping regulatory boundaries in the U.S., which eventually led to a $30 million settlement with the SEC over the operation of its crypto asset staking-as-a-service program in Feb. 2023.

While just a handful of major cryptocurrency exchanges offer bespoke lending services, the decentralized finance (DeFi) space presents a myriad of avenues for cryptocurrency users to earn interest on loaned digital assets.

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Crypto trading firm Auros Global misses DeFi payment due to FTX contagion

December 1, 2022 Coin Telegraph

Auros

Auros is an algorithmic trading and market-making firm that provides liquidity for exchanges and token projects.

Crypto trading firm Auros Global appears to be suffering from FTX contagion after missing a principal repayment on a 2,400 Wrapped Ether (wETH) decentralized finance (DeFi) loan.

Institutional credit underwriter M11 Credit, which manages liquidity pools on Maple Finance, told its followers in a Nov. 30 Twitter thread that the Auros had missed a principal payment on the 2,400 wETH loan, which is worth in total around $3 million.

M11 Credit suggests that it is always in close communication with its borrowers, particularly after events in the last month, and said Auros is experiencing a “short-term liquidity issue as a result of the FTX insolvency.”

We remain committed to providing transparent updates whenever possible, and are working with Auros to provide a joint statement that provides further information to lenders.

If you have any questions, feel free to reach out at m11credit@maven11.com

5/5
— M11 Credit (@M11Credit) November 30, 2022

While Auros, an algorithmic trading and market-making firm, has not yet addressed the statement by M11 Credit, the thread has been retweeted by Maple Finance itself.

M11 Credit has also stressed that the missed payment does not mean the loan is in default. Instead, the missed payment has triggered a “5-day grace period as per the smart contracts.”

This implies that Auros has until Dec. 5 to make the late payment before it will be declared as being in default.

According to an official Maple Finance Youtube video, if a default occurs, it could result in the borrower’s collateral being liquidated and/or staked maple tokens and USDC on the platform being used to cover any shortfalls to lenders. Enforcement action could also be pursued through New York courts.

M11 credit claims that it is “working with Auros to provide a joint statement that provides further information to lenders.”

Cointelegraph has reached out to both M11 Credit and Auros for comment, but did not receive a reply before time of publication.

Crypto exchange FTX announced on Nov. 11 that it would file for Bankruptcy after having suffered a liquidity crisis and being unable to honor withdrawals. The resulting contagion has spread to numerous other firms. BlockFi declared bankruptcy on November 28.

Galois Capital and New Huo Technology have lost millions of dollars from FTX’s collapse, and Nestcoin has had to lay off workers because of its exposure to the failed exchange.

BlockFi sues FTX’s Bankman-Fried over shares in Robinhood

November 29, 2022 Coin Telegraph

Bankruptcy

BlockFi is demanding Bankman-Fried’s investment company turn over its shares in Robinhood as collateral it agreed to pay as part of a pledge agreement.

Newly-bankrupt crypto lending platform BlockFi has filed a lawsuit against Sam Bankman-Fried’s holding company Emergent Fidelity Technologies seeking his shares in Robinhood that were pledged as collateral earlier in November.

The suit was filed on Nov. 28 in the United States Bankruptcy Court for the District of New Jersey just hours after BlockFi filed for Chapter 11 bankruptcy in the same court.

As per the filing, BlockFi is demanding Emergent turnover collateral as part of a Nov. 9 pledge agreement that saw Emergent agree to a payment schedule with BlockFi that it has allegedly failed to pay.

BlockFi names the collateral as “including certain shares of common stock.”

In May, Bankman-Fried acquired a 7.6% stake in the online brokerage firm Robinhood, buying a total of $648 million in Robinhood shares through his Emergent investment company.

BlockFi is one of the latest firms to file for bankruptcy as a result of the collapse of FTX crypto exchange.

The crypto firm initially previously denied that a majority of its assets were held on FTX earlier in the month, but also acknowledged “significant exposure” to FTX.

In its bankruptcy filing, BlockFi stated that it has assets between $1 billion and $10 billion with liabilities in the same range, along with over 100,000 creditors.

$100M drained from Solana DeFi platform Mango Markets, token plunges 52%

October 12, 2022 Coin Telegraph

Blockchain security

The platform’s treasury was drained of over $100 million worth of cryptocurrency after an attacker manipulated price data of its native token to take out loans against their holdings.

Solana (SOL) based decentralized finance (DeFi) exchange Mango Markets has been hit with a reported exploit of over $100 million through an attacker manipulating price oracle data, allowing them to take out under-collateralized cryptocurrency loans.

The exploit was first identified by blockchain security firm OtterSec which tweeted the exchange had been drained of over $100 million due to the attacker manipulating the value of their Mango (MNGO) native token collateral, then taking out “massive loans” from Mango’s treasury.

It appears the attacker was able to manipulate their Mango collateral. They temporarily spiked up their collateral value, and then took out massive loans from the Mango treasury. pic.twitter.com/2IJrB9RcEJ
— OtterSec (@osec_io) October 11, 2022

The Mango Markets team tweeted soon after warning users not to deposit funds until “the situation was more clear” and asked the attacker to contact them to discuss a bug bounty.

The team later confirmed the manipulation of a price oracle — a price data feed of the value of its MNGO token — and stated that it had disabled deposits whilst it continued investigations of the incident.

We will be disabling deposits on the front end as a precaution, and will keep you updated as the situation evolves.

If you have any information, please contact blockworks@protonmail.com to discuss a bounty for the return of funds. 2/
— Mango (@mangomarkets) October 11, 2022

Due to news of the exploit, the price of the platforms’ MNGO token has fallen by around 52% in the last 24-hours at the time of writing according to data from CoinGecko.

The exploiters' account on the platform shows the three largest withdrawals were for $50 million worth of USD Coin (USDC), over $26.7 million worth of a Solana staking token called Marinade Staked SOL (mSOL), and nearly $24 million worth of SOL.

Over $14.7 million worth of MNGO was withdrawn and Mango said it’s “taking steps to have third parties freeze funds in flight.”

Meanwhile, the QANplatform blockchain also suffered from an exploit of its ownon Oct. 11, with its Ethereum (ETH) bridge drained of around $1.89 million worth of its native QANX token according to blockchain security company Beosin. QANplatform says it’s investigating the incident.

Celsius changes legal team, pays off $20M in Aave debts

July 11, 2022 Coin Telegraph

Celsius

The embattled platform continues to wind down its debts to decentralized finance (DeFi) lending protocols, having just paid off 20 million USDC to Aave.

Crypto lending platform Celsius has reportedly hired lawyers from Kirkland & Ellis LLP to advise on its restructuring options — the same firm that assisted Voyager Digital with its bankruptcy filing last week.

According to a report from the Wall Street Journal on July 10, the company has hired lawyers to advise on options, including a bankruptcy filing in place of the previously hired law firm Akin Gump Strauss Hauer & Feld LLP.

Kirkland & Ellis LLP describes itself as an international law firm that serves clients in private equity, M&A, and other corporate transactions, having been founded in 1909.

The law firm has also been tapped as general bankruptcy counsel for Voyager Digital in its bankruptcy proceedings, which it filed in the Southern District Court of New York on July 5, days after pausing trading, withdrawals, and deposits on liquidity issues.

Despite ongoing concerns that the crypto lender may follow a similar path, Celsius has continued to wind down its debts to decentralized finance (DeFi) lending protocols, having just paid off 20 million in USD Coin (USDC) to Aave.

The latest loan repayment was picked up by blockchain analytics firm Peckshield on Sunday, July 10, sharing a screenshot of the 20 million USDC transfer from a Celsius wallet to Aave Protocol V2.

#PeckShieldAlert Celsius (0x8ace...130ee8) has repaid 20m $USDC on Aave pic.twitter.com/U7h1Lvyy5x
— PeckShieldAlert (@PeckShieldAlert) July 11, 2022

Defi tracking platform Zapper shows that Celsius still owes approximately $130 million in USDC and $82,500 in Ren (REN) to Aave, along with $85.2 million in Dai (DAI) to the Compound protocol, with a total debt of $215 million.

Last week, the lending platform paid off its remaining $41.2 million debt to Maker protocol on July 7, freeing up more than $500 million in Wrapped Bitcoin (wBTC) collateral.

Paying down debt has been seen as a positive for Celsius’ depositors, who have not been able to access their crypto funds since withdrawals halted on June 13 and fear a loss of their funds if the company were to go bankrupt.

Last week, crypto lawyer Joni Pirovich told Cointelegraph that Celsius’ repayment of its loan position would ultimately assist its customers, as it would free up capital which could be used to meet customer withdrawal requests.

Pirovich added that even if Celsius files for bankruptcy, repaying its loan position and withdrawing collateral could improve the situation of its customers.

Celsius moved $529M worth of wBTC to FTX exchange: Should we be worried?

July 8, 2022 Coin Telegraph

Celsius

The crypto community is concerned that the transfer could lead to the dumping of more than $500 million Bitcoin into the market.

Embattled lending platform Celsius has transferred nearly 25,000 Wrapped Bitcoin (wBTC), worth $528.9 million to crypto exchange FTX, prompting concerns from some in the community about whether a dump may soon follow.

The huge transfer to the exchange comes after the lending platform paid off its remaining $41.2 million of debt to Maker (MKR) protocol, freeing up its loan’s entire wBTC collateral.

However, the community is unsure what to make of the transfer, with some fearing that a dump of the wBTC on the exchange could soon follow, pushing Bitcoin prices down.

Others have been more hopeful that the move may be in preparation for Celsius to swap their wrapped Bitcoin for BTC, which may be a good sign for depositors who’ve been hoping for Bitcoin withdrawals to eventually reopen on the Celsius platform. Bitcoin is up 8% in the past 24 hours to trade above $22,100, suggesting market participants are taking the news in their stride.

The 21,962 WBTC unlocked from paying off the remaining DAI loan has already found its way to FTX...

that didn't take long...

Incoming $BTC dump? https://t.co/A9B9YaLQ1W #CelShortSqueeze = #CelPumpAndDump

Not your keys, not your crypto pic.twitter.com/V2edblhmXZ
— Airdawg (@Colwellinvestor) July 7, 2022

The 25,000 wBTC sent to FTX follows the news earlier today that 150,000 BTC may be potentially released into the market as Mt.Gox creditors get their BTC back after an eight-year wait.

So far, both Celsius and CEO Alex Mashinsky have remained radio silent about any movement of funds.

Crypto lawyer Joni Pirovich, Principal of Blockchain & Digital Assets told Cointelegraph on July 7 that Celsius’ repayment of its loan position with Maker will ultimately assist its customers.

“Maker protocol relies on overcollateralized loan positions, so the loan repayment of US$41 million worth of DAI released 21,962 WBTC of capital which is now available to meet customer withdrawal requests.”

Pirovich added that even if Celsius ends up filing for bankruptcy, that repaying the loan position and withdrawing collateral could improve the position of customers.

“The question is what will Celsius do with the withdrawn collateral? Keep it in reserve for customers or risk it to trade and on-lend.”

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Loan