Orthogonal Credit alleged key weaknesses in Alameda’s due diligence early in 2022
Orthogonal Credit, an arm of the digital asset hedge fund Orthogonal Trading, disclosed on Nov. 9 that it pushed to close Alameda Research’s dedicated borrower pool on Maple Finance in the second quarter of 2022 after identifying “key weaknesses” in its due diligence.
The company announced on Twitter that it had identified a number of key weaknesses while conducting due diligence earlier this year — specifically, declining asset quality and unclear capital policy, among other factors.
The assessment led the firm to push Maple Finance to halt Alameda loans in May, after issuing $288 million in loans in a pool dedicated to Alameda during November 2021 and May 2022.
“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,” said the company in the thread.
Further, we actively pushed to close the Alameda dedicated borrower pool on @maplefinance during 2Q22. Exposure to FTX is limited across our borrowers in USDC01. (2/x)
Maple is a decentralized finance credit platform that claims to hold 50% of the institutional crypto lending market based on the total volume of loans outstanding. The platform has issued over $1.8 billion in loans since May 2021. Speaking to Cointelegraph on the sidelines of the Converge22 conference in San Francisco in September, Maple Finance co-founder and CEO Sid Powell said that transparency has been the saving grace of decentralized finance during the prolonged crypto market downturn.
M11 Credit, another Maple delegate, also denied having existing loans to Alameda Research. “We are pleased to see the majority of our counterparties actually front-ran and took swift
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