Babel Finance Wins Creditor Protection Extension to Launch Hope Project19. April 2023
• Babel Finance, a Hong Kong-based crypto lender, has been granted an extension of its creditor protection by a Singaporean court.
• The firm plans to bring into place a restructuring plan via a new decentralized finance project named Hope.
• Babel Finance is indebted to its creditors for an amount that could surpass $800 million, and it’s now requesting an extended period of creditor protection to implement its restructuring plan.
Babel Finance Granted Creditor Protection Extension
Hong-Kong-based crypto lender Babel Finance which operated out of Singapore has been granted an extension of its creditor protection by a Singaporean court, according to Flex Yang, the company’s co-founder. The extension is expected to last for approximately three months, providing the crypto lender with additional time to address any outstanding financial obligations and potentially avoid insolvency.
Restructuring Plan via Hope Project
During the period of the extension, the crypto firm plans to bring into place a restructuring plan via a new decentralized finance project named Hope. This initiative will allow the firm to explore new opportunities for growth and sustainability within the crypto lending market. Deribit, the top options exchange for Bitcoin and Ether and a creditor of Babel Finance, had expressed concerns about the restructuring plan. To this end, the exchange requested an independent advisor, Alvarez & Marsal, to monitor the plan.
Liquidity Challenges During Bearish Crypto Market
During the bearish crypto market in 2022, Babel Finance was one of several crypto lending companies which had undergone significant liquidity challenges. In June 2022, the crypto lending platform was forced to halt withdrawals and redemptions from its products owing to unexpected liquidity pressures. Reports indicate that the crypto lender suffered a loss of $280 million from proprietary trades involving customer funds.
Potential Debt Exceeding $800 Million
Babel Finance is indebted to its creditors for an amount that could surpass $800 million. In an effort to repay this debt, the company has requested an extended period of creditor protection to implement its restructuring plan. This plan involves the issuance of “Babel Recovery Coins,” which will be generated by a new decentralized finance project with revenue used to repay outstanding debts owed by Babel Finance..
In-Court Restructuring Procedure Initiated
In addition ,in recent Twitter post Flex Yang co-founder revealed that Singapore High Court officially initiated in court restructure procedure on April 17th .Yang emphasized his commitment towards DeFi (Decentralized finance)project called HOPE .