• Orthogonal Trading, a digital asset trading firm, has been placed in provisional liquidation by the British Virgin Islands courts at the request of M11 Credit.
• The move follows Orthogonal Trading’s default on $36 million in loans from M11 Credit-managed lending pools on decentralized finance protocol Maple Finance.
• Kroll, a corporate investigation and risk consulting firm, has been contracted by M11 Credit and Maple to help recover assets to depositors.
Digital asset trading firm Orthogonal Trading has been placed under provisional liquidation by the British Virgin Islands courts, following a request from M11 Credit. The move comes after Orthogonal Trading defaulted on $36 million of loans from M11 Credit-managed lending pools on decentralized finance protocol Maple Finance.
The request for the provisional liquidation was initially made by M11 Credit and Maple on Dec. 15. After considering the evidence presented, the British Virgin Islands High Court granted the request. M11 Credit believes that Orthogonal Trading had been operating while insolvent for weeks before missing payment and that the firm misrepresented its losses in the FTX collapse. Maple has since removed Orthogonal Trading from the platform, and depositors in impacted lending pools are facing up to 80% losses.
In response to the situation, M11 Credit and Maple have contracted Kroll, a U.S-based corporate investigation and risk consulting firm, to help recover assets to depositors. This is not the only firm facing financial troubles on the platform, as Auros Global, which also has outstanding debt to Maple credit pools managed by M11 Credit, applied for provisional liquidation of its own accord on the British Virgin Islands last month to pursue restructuring its debt.
The future of Orthogonal Trading remains uncertain as it attempts to secure fresh funding to cover all outstanding liabilities. The provisional liquidation will allow the firm to be able to recover any assets and return maximum value to lenders. It remains to be seen what the final outcome of this situation will be.