Maple Finance Lending Pool Delegate ‘Identified a Number of Key Weaknesses’ Tied to FTX’s Alameda Research


According to a report from Orthogonal Credit, a delegate of Maple Finance’s lending pools, the firm decided “earlier this year” not to lend to Alameda Research, FTX’s quantitative trading firm. Orthogonal said through “due diligence” it “identified a number of key weaknesses” associated with Alameda.

Orthogonal Credit Found ‘Key Weaknesses’ Tied to FTX’s Alameda Research Earlier This Year

A Twitter thread published by Orthogonal Credit explains that the firm identified a few weaknesses tied to Alameda Research. The Twitter revelation is explained in a tweet that details Orthogonal Credit, a delegate of Maple Finance’s lending pools, has “no Alameda exposure and have not underwritten a loan to Alameda since Feb ’22.”

Orthogonal then detailed that the firm “actively pushed to close the Alameda dedicated borrower pool on [Maple Finance] during 2Q22.” The firm said that the Orthogonal team discovered issues related to FTX’s quantitative trading firm.

“During our Alameda due diligence earlier this year, the team identified a number of key weaknesses: a) declining asset quality, b) unclear capital policy, c) less than robust operational and business practices, and d) an increasingly byzantine corporate structure,” Orthogonal told the public. The Maple Finance lending pool delegate further added:

We considered these key weaknesses and made a commercial decision to sever our institutional lending relationship. Not a decision we took lightly but a necessary part of proactive risk management.

Orthogonal’s testimony follows a slew of companies stressing to the public that they had no material exposure to FTX. The Maple Finance lending pool delegate concluded that the firm has an “unwavering commitment to crypto as an asset class is important during uncertain times; and equally critical is a proactive and methodical approach to risk.”

In addition to Orthogonal’s account of the situation, the digital currency market maker Wintermute said it had funds locked on FTX. “We do have remaining funds on FTX, and while this is not ideal, the amount is within our risk tolerances and does not have a significant impact on our overall financial position,” Wintermute detailed. “As a market neutral trading firm, we do not have any directional exposure to FTT tokens or related ecosystem assets,” the firm added.

What do you think about Orthogonal Credit’s testimony concerning FTX exposure and finding risks associated with FTX’s quantitative trading firm Alameda Research? Let us know what you think about this subject in the comments section below.

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