I've had some loan repayments come in, and will be setting up a batch of pro-rata payments today. yes, there are a bunch of cascade defaults occurring, and there is a healthy balance of people that have asked for their deposits returned.
If it were me, I'd ignore withdrawal requests after default was announced and make pro-rata payments as repayments come in. I don't see anything wrong with splitting your losses with your depositors. Their decision to invest was just as bad as your decision to offer the service.
mostly agree, although it would be good to know who defaulted and for how much. If you are going to pass losses on to investors, its only fair they know (and can verify) who they owe the loss to.