17. April 2024

Babel Finance Launches Hope DeFi Project to Restructure Debts

• Babel Finance, a Hong Kong-based crypto lender operating out of Singapore, has been granted an extension of its creditor protection period by the Singapore High Court.
• The company plans to implement a restructuring plan through a new DeFi project called Hope in order to address any outstanding financial obligations and avoid insolvency.
• The firm is indebted to its creditors for an estimated amount of $800 million, which will be repaid through revenue generated from the Hope project.

Babel Finance Granted Extension of Creditor Protection

Hong-Kong-based crypto lender Babel Finance has been granted an extension of its creditor protection by a Singaporean court. This provides the firm with additional time to work on addressing any existing financial obligations and possibly avoiding insolvency.

Restructuring Plan via New DeFi Project

In order to explore new opportunities for growth and sustainability within the crypto lending market, Babel Finance plans to bring into place a restructuring plan through a new decentralized finance (DeFi) project named Hope. This initiative would enable the firm to generate revenue from it in order to repay its debtors.

Concerns Raised by Deribit Exchange

Deribit, one of Babel Finance’s creditors who is also the top options exchange for Bitcoin and Ether, had raised concerns about this restructuring plan. As such, they requested an independent advisor – Alvarez & Marsal – to monitor it closely.

Bear Market in 2022 Impacts Crypto Lending Companies

During bearish market times in 2022, many crypto lending firms faced liquidity issues including Babel Finance which had halted withdrawals and redemptions from their products due to unexpected pressures. Reports indicate that these issues resulted in losses totalling $280 million arising from proprietary trades involving customer funds.

Debts Totalling up To $800 Million

The crypto lender is presently indebted to its creditors up to $800 million; hence they have requested an extended period of creditor protection so as implement their restructuring plan which involves issuing “Babel Recovery Coins” that would eventually lead them out of debt repayment problems.