Bitcoin Miner Greenidge Enters Non-Binding Debt Restructuring Deal With NYDIG

December 20, 2022 Bitcoin.com

Tether to reduce secured loans to zero in 2023 amid battle against FUD

December 14, 2022 Coin Telegraph

The move comes in response to a wave of mainstream media attacks and FUD, primarily from the Wall Street Journal.

The world’s largest stablecoin issuer, Tether, has pledged to eventually stop the practice of lending out funds from its reserves, saying it is “mission critical to restore faith" in the crypto market.

In a Dec. 13 post, the stablecoin issuer addressed recent mainstream media FUD (fear, uncertainty, and doubt) concerning its secured loans, among other FUD which have hit the "rumor mill."

Tether reiterated that its secured loans are over-collateralized and covered by “extremely liquid assets,” while also adding that the firm would be eliminating these loans throughout 2023, stating:

Tether is announcing starting from now, throughout 2023, it will reduce secured loans in Tether’s reserves to zero.

Tether’s secured loans operate similarly to private banks lending to customers using secured collateral, the company explained. However, unlike banks that operate on fractional reserves, Tether claimed that its loans are fully backed by over 100%.

The move is likely in response to a WSJ report earlier this month that alleged these loans were risky. It claimed that the “company may not have enough liquid assets to pay redemptions in a crisis.”

#Tether Addresses FUD Around Secured Loans, Reveals Plans to Reduce These to Zero in 2023https://t.co/nZcPr8RiF1
— Tether (@Tether_to) December 13, 2022

It is not the first time the WSJ has targeted Tether. In August the outlet said that Tether could be deemed “technically insolvent” if its assets fell just 0.3%. The stablecoin issuer refuted the claims at the time stating that it had increased the legitimacy and transparency of its attestations by hiring a top-5 accounting firm.

According to those attestations, 82% of Tether reserves are held in "extremely liquid" assets.

In October, Tether responded to more media FUD by further eliminating commercial paper from its reserves and replacing the investments with U.S. Treasury Bills.

In its most recent statement, the company stated that it will wind down its lending business without losses and continue its mission to prioritize transparency and accountability.

“We will continue to show Tether’s resilience through the most uncertain times, regardless of the story fabrications and disinformation concocted by Tether Truthers and clickbait headlines from mainstream media that have been consistently wrong about Tether, for close to a decade.”

Tether is currently the leading stablecoin issuer with 65.8 billion USDT circulating giving it a market share of 46.6%, according to CoinGecko.

Crypto Lending Platform BlockFi Announces Withdrawal Freeze, Blames ‘Lack of Clarity’ at FTX and Alameda Research

November 11, 2022 The Daily Hodl

Binance to Offer $500 Million Worth of Loans to Crypto Mining Industry

October 16, 2022 Bitcoin.com

Wintermute repays $92M TrueFi loan on time despite suffering $160M hack

October 16, 2022 Coin Telegraph

Wintermute repays M TrueFi loan on time despite suffering 0M hack

Coin Telegraph

After repayment of TrueFi’s $92 million loan, Wintermute still owes $97.4 million to Maple Finance and Clearpool in loans.

When Wintermute, a cryptocurrency market maker, lost $160 million due to a hack, concerns related to the repayment of debt worth $189.4 million surfaced. However, in an exciting turn of events, Wintermute paid back its largest debt due Oct. 15, involving a $92 million Tether (USDT) loan issued by TrueFi.

After repayment of TrueFi’s $92 million loan, Wintermute still owes $75 million to Maple Finance in USD Coin (USDC) and wrapped ether (WETH) and $22.4 million to Clearpool, a total of $97.4 million in debt.

Loan details show that Wintermute Trading had borrowed $92.5 million for a term period of 180 days. James Edwards from Libre Blockchain suspects that “some of the funds from their recent "hack" contributed to the payback.” He further claimed that BlockSec’s attempt to debunk the conspiracy theory around an inside job theory might be a miss.

Edwards stated that BlockSec was previously “dead wrong” in calling out another firm for using the "Vanity address" tool, adding that:

“To believe that a market maker handling billions of dollars (their words) worth of crypto assets per day would use such a tool to create an address ultimately responsible for managing hundreds of millions of dollars in value is preposterous.”

Supporting his claim, Edwards pointed out the GitHub URL to the vanity address tool Wintermute supposedly used to generate their vanity address, as shown below.

On Oct. 10, TrueFi issued a default notice to Blockwater Technologies for missing a scheduled payment related to a $3.4 million loan in Binance USD (BUSD).

Attempting remediation to a $117 million exploit, Mango Markets offered the hacker to keep $47 million as a bug bounty while requesting the return of $67 million of the stolen funds.

A majority, 98%, of the Mango Markets community approved the decision and also supported that no legal action would be taken against the hacker once the $67 million was returned.

However, some of the community members raised objections to the near $50 million bug bounty, which, in one voter's words, “is ridiculous.”

Mango Market’s DAO forum set to approve $47M settlement with hacker

October 14, 2022 Coin Telegraph

<div>Mango Market's DAO forum set to approve M settlement with hacker</div>

Coin Telegraph

Over 98% of voting tokens favor the deal, which also stipulates that Mango Markets won't pursue criminal charges.

Following a $117 million exploit on Oct. 11, the Mango Markets community is set to make a deal with its hacker, allowing the hacker to keep $47 million as a bug bounty, according to the decentralized finance (DeFI) protocol governance forum.

The proposed terms reveal that $67 million of the stolen tokens will be returned, while $47 million will be kept by the hacker. 98% of the voters, or 291 million tokens, have voted in favor of the deal, which also stipulates that Mango Markets will not pursue criminal charges on the case.

With the quorum reached, the voting is likely to happen on Oct. 15. The proposal stated:

"The funds sent by you and the mango DAO treasury will be used to cover any remaining bad debt in the protocol. All mango depositors will be made whole. By voting for this proposal, mango token holders agree to pay off the bad debt with the treasury, and waive any potential claims against accounts with bad debt, and will not pursue any criminal investigations or freezing of funds once the tokens are sent back as described above."

On Twitter, members of the community reacted to the development:

Mango hacker securing himself a ~$47m bug bounty.

Biggest crypto bounty by far?

The current bounty going rate of 10% of exploited funds is going to need to be repriced lmao. pic.twitter.com/FcHkEbwY7u
— Hsaka (@HsakaTrades) October 14, 2022

The proposal has been questioned at the governance forum as well, as stated by one voter:

"Agree 100% that making users funds whole ASAP is the top priority but a $50m "bug bounty" is ridiculous. At most the exploiter should get their costs back ($15m?) plus $10m. $10m whitehat bounty is what was offered to the $600m wormhole hacker. Mango can negotiate better than this, especially given the exploiter is essentially doxed."

The hacker performed the attack by manipulating the value of the MNGO native token collateral, then taking out “massive loans” from Mango’s treasury. After draining the funds, the hacker demanded a settlement, filling a proposal on the Mango Market's decentralized autonomous organization (DAO) forum asking for $70 million at that time.

Moreover, the hacker has voted for this proposal using millions of tokens stolen from the exploit. On Oct. 14, the proposal reached the required quorum to pass. In exchange for the settlement, the hacker requests that users who vote in favor of the proposal agree to pay the bounty, pay off the bad debt with the treasury, waive any potential claims against accounts with bad debt and not pursue any criminal investigation or the freezing of funds.

TrueFi issues first default notice on $3.4M BUSD loan

October 10, 2022 Coin Telegraph

TrueFi issues first default notice on .4M BUSD loan

Coin Telegraph

TrueFi does not expect Blockwater Technologies' default to affect its stablecoin lending pools or capital market portfolios.

On Oct. 10, unsecured lending protocol TrueFi issued a default notice to Blockwater Technologies for missing a scheduled payment related to its $3.4 million Binance USD (BUSD) loan, the first declared default on the platform to date. According to the company, the default does not impact lenders in its USD Coin (USDC), TrueUSD (TUSD) and Tether (USDT) stablecoin lending pools, "nor any of TrueFi’s capital market portfolios."

As outlined in the statement, TrueFi had an extensive out-of-court workout with Blockwater's principals last week. After reviewing the "complexity around the sudden insolvency," the company concluded that a court-supervised administrative proceeding would bring better outcomes for stakeholders.

The companies are in active discussions about maximizing the recovery for lenders and stakeholders. According to the statement:

"To date, Blockwater has completed 8 payments totalling $645,405 towards loan repayment. $2,967,458 remains due at the time of the default. Further updates will be provided to the TrueFi community and any action required by TrueFi DAO will be subject to tokenholder vote and approval."

Established in 2018, Blockwater Technologies is a hedge fund headquartered in Seoul, South Korea. The company's LinkedIn profile claims that its portfolio includes exposure to projects such as Fantom, Bifrost and Playdapp. The Blockwater website was unavailable at the time of publication.

TrueFi claims it has originated more than $1.7 billion in unsecured loans and has successfully collected approximately $1.5 billion in repayments across 136 loans, generating $34.34 million in interest for lenders. As stated by the company:

"Despite market conditions, borrower demand remains high and continues to outpace available capital. With a traditional and rigorous approach to underwriting, TrueFi’s loan book remains healthy and active across both crypto-native and real world lending."

In June, TrueFi was launched on Optimism, Ethereum’s popular layer-2 scaling solution. The company also announced in February a new lending marketplace, allowing asset managers to create their own decentralized finance products.

Maple Finance launches $300M lending pool for Bitcoin mining firms

September 20, 2022 Coin Telegraph

Bitcoin

The institutional lending platform has facilitated $1.8 billion worth of digital currency loans since May 2021.

On Tuesday, institutional crypto lending protocol Maple Finance and its delegate Icebreaker Finance announced that they would provide up to $300 million worth of secured debt financing to public and private Bitcoin mining firms. Qualified entities meeting treasury management and power strategies management standards located throughout North America, as well as those in Australia, can apply for funding.

On the other hand, the venture seeks to deliver risk-adjusted returns in the low teen percentages (up to 13% per annum) to investors and capital allocators. The pool is only open to accredited investors who meet substantial income and/or net worth qualifications within a jurisdiction. In the United Stat, among many criteria, this means having an annual pre-tax income of over $200,000 ($300,000 with a spouse) or having a liquid net worth of more than $1 million.

As told by Maple Finance, underlying loans in the new lending pool would last for 12 to 18 months with interest rates of up to 20%. The loan would be secured by physical and intellectual assets of the borrower, possibly including that of Bitcoin mining rigs. Regarding the development, Sidney Powell, CEO and co-founder of Maple Finance, stated:

"Recent market headwinds have caused lenders to pull back, while traditional financing vehicles have been slower to engage this sector. Miners play an essential role in growing the crypto ecosystem and local economies, and we are proud to extend a new financing vehicle to direct capital where it is needed the most."

Maple currently holds 50% of the institutional crypto lending market as measured by total loans outstanding. At the time of publication, liquidity pools on Maple have issued close to $1.8 billion worth of loans since its inception in May 2021.

Today, @IcebreakerDeFi joins Maple and opens a $300M capacity pool to provide secured debt financing to blue-chip Bitcoin mining and digital asset infrastructure companies. pic.twitter.com/ZWyLV2P9hr
— Maple (@maplefinance) September 20, 2022

DeFi protocol token NFD crashes by 99% after a flash loan attack

September 8, 2022 Coin Telegraph

Coin Telegraph

Flash loans allow users to borrow a high amount of assets without having to provide any upfront collateral, this is often used by miscreants to launch attacks on DeFi protocols.

New Free DAO, a decentralized finance (DeFi) protocol, faced a series of flash loan attacks on Sept. 8, resulting in a reported loss of $1.25 million. The price of the native token has dropped by 99% in the wake of the attack.

Unlike normal loans, several DeFi protocols offer flash loans that allow users to borrow large amounts of assets without upfront collateral deposits. The only condition is that the loan must be returned in a single transaction within a set time period. However, this feature is often exploited by malicious adversaries to gather large amounts of assets to launch costly exploitations targeting DeFi protocols.

Blockchain security firm Certik alerted the crypto community on Thursday about the 99% price slippage of the NFD token due to a flash loan attack. The attacker reportedly deployed an unverified contract and called the function “addMember()” to add itself as a member. The attacker later executed three flash loan attacks with the assistance of the unverified contract.

#CertiKSkynetAlert

New Free Dao - $NFD was exploited via flash loan attack gaining the attacker 4481 WBNB (approx. ~$1.25M) causing the token to slip in price 99%.

The attacker has connections to Neorder - $N3DR attack from 4 months ago where they took 930 BNB at the time. pic.twitter.com/5Rcht3YiIK
— CertiK Alert (@CertiKAlert) September 8, 2022

The attacker first borrowed 250 WBNB worth $69,825 via flash loan and swapped all of them for the native token NFD. The contract was then used to create multiple attack contracts to claim airdrop rewards repeatedly. The attacker then swapped all the airdrop rewards for WBNB benefiting 4481 BNB.

Out of the 4481 BNB, the attacker returned the borrowed loan (250 BNB) and swapped 2,000 BNB for 550,000 BSC-USD. Later, the attacker moved 400 BNB to the popular coin mixer service Tornado Cash.

*Fund Movement From NFD Attacker Wallet to Tornado Cash Source: BSC Scan*

Certik also notified that the hacker behind the flash loan attack on NFD was related to those who exploited Neorder (N3DR) in May earlier this year. Later, another blockchain security firm Beosin told Cointelegraph that the attackers behind both the exploits could be the same.

Beosin also highlighted another vulnerability with the NFD protocol that could be further used for another type of flash loan attack. The security firm said that the price could be manipulated since they are calculated “using the balance of USDT in the pair, so it may lead to flash loan attack if exploited.”

3/ Although unrelated to this attack, we also find another vulnerability in the $NFD contract that may lead to price manipulation. pic.twitter.com/kKvx4hRdE4
— Beosin Alert (@BeosinAlert) September 8, 2022

Flash loan attacks have been increasingly popular among hackers due to the low risk, low cost and high reward factors. On Sept. 7, Avalanche-based lending protocol Nereus Finance became a victim of a crafty flash loan attack resulting in a loss of $371,000 in USDC. Earlier in June, Inverse Finance lost $1.2 million in another flash loan attack.

Singapore authorities approve probe of 3AC on behalf of liquidators: Report

August 24, 2022 Coin Telegraph

Bankruptcy

Liquidator Teneo has recovered only a miniscule portion of the Singapore-based Three Arrows Capital so far, while cofounder Zhu has allegedly tried to sell property there.

The Singapore High Court on Monday approved a petition to recognize the liquidation order against Three Arrows Capital (3AC) issued by a court in the British Virgin Islands, Bloomberg reported Wednesday, citing unnamed sources. The Singapore court’s decision, handed down in private, gives the petitioner the legal ability to request access to 3AC financial records kept in Singapore, where 3AC is based.

Teneo, the firm appointed to liquidate the 3AC assets, filed its petition with the court on July 9, saying the crypto hedge fund may have information in its Singapore headquarters about its bank accounts, properties, digital assets and stakes in other companies. Zhu reportedly tried to sell his $35 million “bungalow” in Singapore in June.

3AC cofounder Zhu Su responded to accusations that the company had been uncooperative with the liquidators in a July 12 tweet saying the company had provided the liquidators with a spreadsheet with details of the company’s assets.

Sadly, our good faith to cooperate with the Liquidators was met with baiting. Hope that they did exercise good faith wrt the StarkWare token warrants. pic.twitter.com/CF73xI8r6n
— Zhu Su (@zhusu) July 12, 2022

Zhu and his partner Kyle Davies allegedly went into hiding after the liquidation order was issued for the company. They later reappeared in an interview with Bloomberg, in which they claimed they were fleeing from death threats.

3AC was ordered into liquidation on June 27 after reportedly missing margin calls. Teneo has gained control of at least $40 million of 3AC assets so far, according to Bloomberg. That sum accounts for only a tiny fraction of the 3AC’s debt to its creditors, which amounts to at least $2.8 billion USD.

The company owes its largest creditor, Genesis Asia Pacific, $2.36 billion. Genesis' parent company Digital Currency Group later had to assume a portion of the trader’s liability to ensure its continuing operations. Voyager Digital also blamed 3AC’s default on a loan of 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) for its decision to freeze withdrawals and other activities on July 1.

loans

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