PANews, June 23 – According to Cryptopolitan, the a16z-backed decentralized credit protocol Goldfinch has announced it will gradually wind down. Last Friday, an investor under the pseudonym Edward Morra publicly accused the protocol of mismanagement, resulting in over $50 million in user fund losses, claiming that borrower defaults and failed loan restructurings have made it nearly impossible for depositors to recover their funds. Just one day after the post was published, the project announced it would enter a gradual shutdown phase. The protocol’s native token, GFI, has fallen from its January 2022 peak of $32.94 to below $0.07, a decline of 99.8%, with its market cap dropping from over $390 million to less than $6 million.

Goldfinch was founded in 2021 by former Coinbase employees, aiming to connect crypto capital with credit businesses overlooked by traditional banks. a16z led its $25 million funding round in January 2022. Problems began to surface within months of the funding: Kenya-based motorcycle financing company Tugende Kenya defaulted; two underlying positions in a $2 billion loan portfolio at U.S. credit fund Stratos were nearly wiped out; and Singapore-based borrower Lend East could only repay 58% of the principal. As the loan portfolio deteriorated, the protocol pivoted to institutional credit funds, but ultimately could not reverse the situation.