Cryptolender Babel gets extended creditor protection in Singapore
Troubled cryptocurrency lending firm Babel Finance has more time to repay debts to creditors like Deribit after suspending withdrawals in 2022.
A court in Singapore has extended creditor protection for Babel Finance by another three months, Bloomberg reported on April 18.
According to Babel co-founder and former CEO Flex Yang, the moratorium will last until July 21, allowing the firm to pursue its restructuring plan via a new decentralized finance (DeFi) project called Hope. Flex returned to oversee Babel’s restructuring process a few years after stepping down as CEO in 2021.
Babel’s restructuring plan involves new tokens called “Babel Recovery Coins,” which are aimed at allowing the troubled lender to generate revenue to repay as much as $800 million to its creditors.
Flex too wrote in an open letter on Twitter that Babel’s bankruptcy protection was heard in the Singapore High Court on April 17, officially opening the legal reorganization proceedings. Noting that his main focus in the future would be the Hope Project, he said:
“In the coming international political changes, HOPE will be an important tool for us to reconnect the world. […] We are confident that our new team will continue to use their hope and light to bring the new project forward.”
As previously reported, the co-founder of Flex Hope launched the DeFi project in mid-March 2023, positioning the initiative as a combination of DeFi and centralized finance to enable transparency and security at the DeFi level and centralized access at the financial level.
Related: Celsius is said to have prepared legal proceedings against the creditor for leaking internal information
Another Babel co-founder, Yang Zhou, originally introduced the Hope project in early March, describing his original Babel Recovery Coin as a stablecoin minted as security based on Bitcoin (BTC) and Ether (ETH). The token is designed to maintain its 1:1 peg to the US dollar through arbitrage incentives for traders.
Babel was one of many crypto lending companies that experienced major liquidity problems due to the bear crypto market in 2022. The Hong Kong-based firm suspended withdrawals and redemptions from its products in June, citing unusual liquidity pressures. Babel reportedly lost $280 million in proprietary trades with customer funds.
Blade: Asia Express: Bitcoin glory on Chinese TikTok, 30 million mainland users, Justin Sun saga
