Orthogonal Credit alleged key weaknesses in Alameda's due diligence in early 2022

The company pushed Maple Finance to shut down Alameda's dedicated borrower pool earlier this year.

Orthogonal Credit, an arm of digital asset hedge fund Orthogonal Trading, revealed Nov. 9 that it pushed to close Alameda Research's dedicated borrower pool on Maple Finance in Q2 2022 after identifying the "key weaknesses" of its due diligence.

The company announced on Twitter that it had identified a number of key weaknesses during due diligence earlier this year, in particular declining asset quality and an unclear capital policy, among other factors .

The assessment led the firm to push Maple Finance to suspend Alameda lending in May, after issuing $288 million in loans to a dedicated Alameda pool in November 2021 and May 2022.

“We considered these key weaknesses and made the business decision to terminate our institutional lending relationship. This is not a decision we took lightly, but a necessary part of proactive management risk,” the company said in the thread.

In addition, we actively pushed to close Alameda's dedicated borrower pool on @maplefinance during 2Q22. FTX exposure is limited among our USDC01 borrowers. (2/x)

Maple is a decentralized financial lending platform that claims to own 50% of the institutional crypto lending market based on total outstanding lending volume. 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 transparency has been decentralized finance's saving grace during the prolonged crypto market...