Key Points:
- A Singapore court extends creditor protection for Babel Finance for 3 months until July 21, 2022.
- Babel Finance owes up to $800 million to creditors, which it plans to pay with revenue from a new decentralized finance project minting “Babel Recovery Coins.”
- Babel Finance ran up significant losses using customer funds for proprietary trading, leading to the suspension of withdrawals in June 2022.
Babel Finance, a crypto lender, gets a 3-month creditor protection extension until July 21, 2022. Babel plans to pay its $800M debt with a new decentralized finance project. It froze withdrawals in June 2022 after running up losses.
According to co-founder Flex Yang, a Singapore court has extended creditor protection for Babel Finance, a crypto lender, by about three months until July 21.
Babel Finance, which has a presence in Hong Kong, found itself in trouble during the cryptocurrency market downturn last year and now owes its creditors up to $800 million. The company has requested an extension of creditor protection to pursue a restructuring plan that would use revenue generated by a decentralized finance project to repay its debt by minting “Babel Recovery Coins.”
Deribit, the largest Bitcoin and Ether options exchange and a Babel creditor, had raised objections to the plan and requested an independent adviser to monitor it. Babel incurred significant losses by using customer funds for proprietary trading, leading to the suspension of withdrawals in June 2022. Although it was valued at $2 billion in a funding round last year, several digital asset firms suffered as cryptocurrency prices declined.
Babel Finance, a crypto lender, has been granted a three-month extension to its creditor protection until July 21, as declared by co-founder Flex Yang. Babel ran into trouble during last year’s crypto meltdown and owes up to $800 million to creditors. The company had requested an extension of creditor protection to pursue a proposed restructuring plan using revenue from a new decentralized finance project, which would mint “Babel Recovery Coins” to repay debt.
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