Orthogonal Trading
CollapsedLending · born 2021 · ✝ 2022
A borrower hid FTX losses and defaulted on its loans.
Orthogonal Trading was a crypto trading firm that borrowed from Maple Finance's on-chain credit pools. In December 2022 it defaulted on roughly $36M after concealing FTX-related losses and misrepresenting its finances, leaving Maple's lenders to eat the loss.
- Peak
- ~$36M default
- Cause
- Collapsed
- Year of death
- 2022
☠️ Cause of death
The firm hid its FTX exposure and continued borrowing while insolvent, then defaulted when the truth surfaced, exposing the credit risk in undercollateralized on-chain lending.
📓 Lessons left behind
- —Undercollateralized loans are only as safe as the borrower's honesty.
- —Self-reported financials can be fabricated.
- —Contagion travels fast through interconnected crypto credit.
🌱 The idea that survived
On-chain credit underwriting
Pushed lending protocols toward stricter borrower verification and real-time risk monitoring.
#lending#default#ftx-contagion