Maple Faces Liquidity Crisis as Orthogonal Loans $10m to Babel

Maple Finance, an institutional crypto capital network, is on the brink of a liquidity crisis due to more withdrawal requests while borrowers are yet to repay crypto loans.

The information came via Maple’s official Twitter on June 21. Maple said lenders would continue accumulating rewards and MPL tokens while awaiting withdrawal. In response to the insufficient fund, they stated:

As loans mature over the coming weeks, borrowers’ repayments will increase the available capital in the pools that lenders can withdraw. Lenders will continue to earn interest and MPL token rewards during this time.

In other words, the smart contracts will continue to process USDC redemptions as it becomes feasible. A later update shows a probable cause for the liquidity pressure Maple faces aside from multiple withdrawal requests. The report said that Orthogonal Trading, a multi-strategy cryptocurrency trading firm, acknowledged that it granted a $10 million loan to Babel Finance from their USDC pool on Maple.

Babel, Celsius, and Three Arrow Capital (3AC) are three crypto lending platforms that are unable to pay customers at the moment. To protect the interests of lenders, Orthogonal has remained in daily contact with Babel management since they halted withdrawals. They pledge to share further updates on the loan situation as they become available with Maple.

Noteworthy is that Maple itself has no direct exposure to Celsius and 3AC. Yet, its borrowers confirmed they have minimal exposure to 3AC and Celsius. Maple remains in communication with its borrowers to gather updated financial statements.

Meanwhile, Maple’s MPL token price had fallen by 76.7% since April 10, when it reached an all-time high of $68.32. It currently trades at $15.93.