Lending Platform Cream Finance Generates $1.3 Million in Bad Debt as SWAG Tokens Plunge

Lending platform Cream Finance has incurred $1.3 million in bad debt as Swag Finance’s SWAG token plummeted this week, according to CryptoBriefing. Cream Finance held $1.3 million in USDC and USDT debt, but the debt became illiquid when SWAG collapsed. Total liquidity in the pool dropped from $18.1 million to $10,000, meaning there was no longer enough money to repay the liquidity provider. The Cream Finance team responded to this issue by confirming that it had suspended lending to SWAG in November 2020. Some of the long-term, long-term loans obtained prior to the suspension were liquidated in the recent decline. Cream Finance also confirmed that it will pay SWAG lenders out of its reserves.