Babel Finance To Issue IOU Tokens As Collateral For Debt $280 Million
- The BRC-USDC and other “IOU” tokens that Babel Finance plans to issue to creditors will be based on BabeDAO.
- The governance token BABE and the underpinning pricing token HOPE are part of the BabeDAO dual-token scheme.
- Babel Finance previously reported losing $280 million on proprietary trading.
Babel Finance is facing unpaid debts. Recently, the DeFi platform has launched initiatives to be able to mortgage its debts to creditors.
According to crypto reporter Wu, the BRC-USDC and other “IOU” tokens that Babel Finance plans to issue to creditors will be based on BabeDAO, which is still the subject of pertinent legal actions. The governance token BABE and the underpinning pricing token HOPE are both parts of the BabeDAO dual-token scheme.
An IOU token is a type of digital asset that is used to represent debt between two parties. IOU stands for “I owe you” and is a contract that acknowledges a certain amount of debt owed.
These tokens can be used to facilitate transactions, such as transferring money, goods, or services between two parties. With the advent of blockchain technology, IOU tokens have become a popular way to facilitate transactions in a secure and efficient manner.
Babel Finance previously reported losing $280 million on proprietary trading. Genesis Zipmex and a few private investors from Chinese-speaking areas are among its biggest debtors.
Babel Finance lost more than $280 million in Ether (ETH) and Bitcoin (BTC) as a result of its private trading failure. In particular, it suffered losses of almost 8,000 BTC and 56,000 ETH in June after being forced to liquidate because of a severe market decline.
The lending and trading divisions of Babel were unable to satisfy counterparties’ margin requests as a result of these significant losses.
According to the Babel proprietary trading team, their orders were not supported by any term sheets and were not recorded in the system as such. The company’s wallet managers also dispersed an unlimited amount of money to trading accounts managed by its proprietary trading team.
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