Babel Finance Financial Creditor Protection Extension Request Paused
Key Points:
- A Singapore court has rejected a decision on crypto lender Babel Finance’s request to extend creditor protection after objections from creditors Deribit.
- The delay will last until April 17 to seek more clarity on the proposed restructuring.
- Outcry due to Babel’s restructuring plan to repay creditors with revenue generated by a new stablecoin.
According to Flex Yang, co-founder and sole director of Babel Finance, a Singapore court has deferred making a decision on an extension of creditor protection because it wants more information on a planned restructuring in light of concerns voiced by creditor Deribit.
Deribit, the biggest Bitcoin and Ether options exchange, has requested the appointment of Alvarez & Marsal as an impartial counsel to oversee the restructuring strategy. An email sent outside of work hours did not immediately receive a response from Deribit.
The ongoing moratorium of protection against creditor action for Hong Kong-based Babel Finance, which also has operations in Singapore, expires on April 5, according to Flex, who left day-to-day management in late 2021 and has since returned to oversee the company’s restructuring. Babel owes debt between $750 million and $800 million. It was one of a number of cryptocurrency businesses that encountered difficulties after the crash in digital assets last year.
A new stablecoin is a part of the restructuring strategy suggested by Babel. The strategy calls for paying back finance’ obligations with money earned from a brand-new project that issues “Babel Recovery Coins.”
Babel Finance’s reorganization plan includes a plan to pay off debts using proceeds from a decentralized stablecoin project called “Hope,” according to sources from Bloomberg. Hope will use BTC and ETH as collateral and pegged the price to USD, similar to the infamous DAI method (collateralized with USDC, ETH) or the UST method (collateralized with LUNA). The difference between Hope and Terra’s stablecoins is that the collateral is not set up by the same business that created LUNA-UST.
The court agreed to a temporary suspension until Babel’s creditor protection petition is heard again on April 17, according to Flex.
Babel Finance, a cryptocurrency lender funds by Sequoia Capital China, incurred losses while using customer cash for its own proprietary trading, leading the lender to halt withdrawals in June 2022 as the value of digital tokens plummeted.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Foxy
Coincu News
Author
News
Babel Finance Financial Creditor Protection Extension Request Paused
Key Points:
- A Singapore court has rejected a decision on crypto lender Babel Finance’s request to extend creditor protection after objections from creditors Deribit.
- The delay will last until April 17 to seek more clarity on the proposed restructuring.
- Outcry due to Babel’s restructuring plan to repay creditors with revenue generated by a new stablecoin.
According to Flex Yang, co-founder and sole director of Babel Finance, a Singapore court has deferred making a decision on an extension of creditor protection because it wants more information on a planned restructuring in light of concerns voiced by creditor Deribit.
Deribit, the biggest Bitcoin and Ether options exchange, has requested the appointment of Alvarez & Marsal as an impartial counsel to oversee the restructuring strategy. An email sent outside of work hours did not immediately receive a response from Deribit.
The ongoing moratorium of protection against creditor action for Hong Kong-based Babel Finance, which also has operations in Singapore, expires on April 5, according to Flex, who left day-to-day management in late 2021 and has since returned to oversee the company’s restructuring. Babel owes debt between $750 million and $800 million. It was one of a number of cryptocurrency businesses that encountered difficulties after the crash in digital assets last year.
A new stablecoin is a part of the restructuring strategy suggested by Babel. The strategy calls for paying back finance’ obligations with money earned from a brand-new project that issues “Babel Recovery Coins.”
Babel Finance’s reorganization plan includes a plan to pay off debts using proceeds from a decentralized stablecoin project called “Hope,” according to sources from Bloomberg. Hope will use BTC and ETH as collateral and pegged the price to USD, similar to the infamous DAI method (collateralized with USDC, ETH) or the UST method (collateralized with LUNA). The difference between Hope and Terra’s stablecoins is that the collateral is not set up by the same business that created LUNA-UST.
The court agreed to a temporary suspension until Babel’s creditor protection petition is heard again on April 17, according to Flex.
Babel Finance, a cryptocurrency lender funds by Sequoia Capital China, incurred losses while using customer cash for its own proprietary trading, leading the lender to halt withdrawals in June 2022 as the value of digital tokens plummeted.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Foxy
Coincu News
Other Posts
Related Posts
Latest
The New Lead of Presidential Crypto Council Appointed by Trump Is Bo Hines
Best New Meme Coins with 1000X Potential: BTFD Coin’s Hot BIG50 Discount As Baby Doge Coin, Dogs Takes Gaming to the Next Level
BlockDAG Surges Past $170M as BDAG250 Bonus End Countdown Begins – Aave Targets $400 & Solana Shines with Scalability
Press Release
Best New Meme Coins with 1000X Potential: BTFD Coin’s Hot BIG50 Discount As Baby Doge Coin, Dogs Takes Gaming to the Next Level
BlockDAG Surges Past $170M as BDAG250 Bonus End Countdown Begins – Aave Targets $400 & Solana Shines with Scalability
