The unsecured lending platform Maple Finance published a blog post announcing that they were severing ties with Orthogonal Trading, who had « misrepresented its financial position » for a month. « It is now clear that they have been operating while effectively insolvent, and it will not be possible for them to continue operating a trading business without outside investment, » wrote Maple.
On December 3, Orthogonal Trading admitted to Maple that they were unable to meet loan repayments. The group was unable to repay a $10 million loan due the following day. The group has $36 million in liabilities across various loans on Maple’s USDC and wETH pools.
Orthogonal Credit, a sister group to Orthogonal Trading, published a blog post distancing themselves, writing that they were « shocked and dismayed » by Trading’s misrepresentation. « We are speechless by the extent of the exposure and liquidity position of Orthogonal Trading’s book of business, » they wrote. They attributed the insolvency to FTX exposure.