Maple Finance Tightens Lending Standards Amid Mass Bankruptcy

Maple Finance has tightened lending standards, requiring borrowers to sign a legal agreement that includes the requirement to submit independently audited financial accounts each year. The standard comes in the wake of a series of crypto-lending bankruptcies due to the harsh market. To date, Maple has had a $10 million default.

In a recent Bloomberg report, decentralized finance app Maple Finance recently introduced tightening standards for lending. This activity is intended to reduce counterparty risk after a wave of defaults swept through the crypto industry this year.

Borrowers now have to sign legal agreements that include a provision to file financial accounts that are independently audited annually, Chief Executive Officer Sid Powell said in an interview.

They are also required to submit monthly reports stating their financial position, including balance sheet information, and are required to register with the credit risk data platform Credora, a data Credit Risk Data provides lenders with real-time information to help them assess how much risk borrowers have accumulated across various crypto exchanges.

To date, Maple has had a $10 million default, CEO Powell said. Maple Finance’s TVL has now dropped from $153 million at the end of June to $12.55 million, according to DefiLlama.

The long crypto winter makes a series of funds, crypto-lending companies go bankrupt. The bankruptcy of crypto hedge fund Three Arrows Capital led to a slew of crypto-lending firms involved. Celsius and Voyager are the two most attention-grabbing names that are still in bankruptcy proceedings.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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