Last Updated on December 21, 2022 by Bitfinsider

Auros Global, a troubled crypto trading firm and market maker, said on Tuesday that a court in the British Virgin Islands authorized its request for “Provisional Liquidation” last month, as part of efforts to restructure outstanding debt to lenders.

In a tweet, Auros explained that the decision was influenced by “the events that transpired around FTX,” the cryptocurrency exchange formerly led by Sam Bankman-Fried that collapsed in November.

Auros said that the court order allows for a “restructuring mechanism where the incumbent management is permitted to continue to trade in the capacity of ‘Authorized Managers,’ under the supervision of an external advisory firm, whilst a restructuring plan is being formulated.”

Auros said: “Upon the successful implementation of the restructuring, it is anticipated that Auros’ operations would resume as normal.”

According to the intelligence website OffShoreAlert, which quoted a court file made on November 16 by the British Virgin Islands High Court, the company had $20 million of money frozen on FTX.

Auros Global Ltd. lodged a request for provisional liquidation on November 16, according to OffshoreAlert, an intelligence agency that monitors financial corporations.

Auros stated that the court granted the request on November 23. A financial advisory firm, Interpath Advising serves as supervisor, according to the Auros statement.

Following the abrupt implosion of FTX, Auros had cash issues. Multiple trading firms kept a portion of their trading capital on the exchange, and were subsequently impacted when FTX ceased withdrawals on November 8 and filed for Chapter 11 bankruptcy protection on November 11. The exchange’s funds are currently encumbered by a lengthy court case.

Liquidity issue

Due to the fact that the troubled trading firm owes approximately $20 million in loans from credit pools on Maple Finance and Clearpool, the liquidity issues at Auros have spread to lending protocol creditors.

The crypto community learned about Auros’ difficulties for the first time on November 30, when M11 Credit tweeted that Auros had failed to repay a $3 million loan from a credit pool, citing “short-term liquidity challenges.” Maple is managed by M11 Credit, a subsidiary of the financial group Maven 11 Capital.

Prior to that, in early November, M11 Credit had extended the terms of two short-term Auros loans without repayment.

Auros has not paid $17.7 million worth of loans from M11 Credit-managed USDC stablecoin and wrapped ether (wETH) credit pools on Maple.

M11 Credit has not issued a notice of default on the loans since it is pursuing a debt restructuring.

M11 Credit tweeted on Tuesday, “We continue to believe that we’re on a path to a successful restructuring.”

The filing for provisional liquidation by Auros came at a time when creditors were concerned about the security of their funds in affected credit pools.