Auros Global, a crypto trading firm, has been granted a Provisional Liquidation request from a British Virgin Islands court to restructure outstanding debt on Nov. 23 and the financial advisory firm Interpath Advisory acts as supervisor.
Auros announced on Twitter that their decision was based on what happened to FTX, the crypto exchange that was run by Sam Bankman-Fried and ended in November.
According to the statement “The company found itself in a position where immediate liquidity was insufficient to satisfy recalls from lenders,” and “Management and directors remained confident in the long-term prospects for the business.”
A court filing to the British Virgin Islands High Court stated that the company had $20 million of assets frozen on FTX.
Auros recently encountered liquidity troubles due to the sudden implosion of FTX. Many firms held funds on the exchange for trading purposes, and were negatively affected when FTX abruptly halted withdrawals on Nov. 8 and filed for Chapter 11 bankruptcy protection on Nov. 11. Unfortunately, the funds on the exchange are now stuck in a lengthy court proceeding, making it difficult for Auros and other trading firms to access their funds.
Auros experienced financial difficulties following the collapse of FTX. Withdrawals were blocked and the exchange filed for bankruptcy protection, leaving trading firms’ funds tied up in a court process.
Auros liquidity issues
The liquidity issues at Auros have had a ripple effect that has been felt by creditors on lending protocols. The trading firm has a total of $20 million of outstanding loans from Maple Finance and Clearpool credit pools, and it has been struggling to pay them back. This has caused a great deal of financial strain on the company, and creditors have had to take measures to protect their interests. The situation is further complicated by the fact that Auros has yet to secure new sources of funding, and the future remains uncertain.
The crypto community was given a shock on November 30th when M11 Credit, a subsidiary of investment firm Maven 11 Capital, tweeted about Auros missing a $3 million loan payment from their credit pool. The tweet explained that Auros was having short-term liquidity problems, which raised concerns in the crypto community. This news spread quickly as M11 Credit is a well-known lending pool manager on Maple, and many people were concerned about the implications this could have on the future of Auros. Fortunately, M11 Credit was able to work with Auros to come to a resolution, but this news serves as a reminder of the importance of being mindful of liquidity problems.
Earlier in November, M11 Credit allowed two Auros loans to be extended without repayment for a short period of time.
Auros has failed to make payments on $17.7 million worth of loans from M11 Credit-managed USDC stablecoin and wETH credit pools on Maple.