Bloomberg today reported that a Singaporean court has granted Babel Finance an additional three months of creditor protection. Babel Finance, a cryptocurrency lending company that ceased withdrawals in 2022, will now have more time to pay back creditors like Deribit.
Babel’s co-founder and former CEO, Flex Yang, stated that the moratorium, which will extend until July 21, 2023, will afford the company the opportunity to implement its reorganization plan through a new decentralized financing (DeFi) project named Hope. Yang returned to oversee Babel’s reorganization process years after stepping down as CEO in 2021.
As part of Babel’s restructuring strategy, the company has introduced Babel Recovery Coins, which are new tokens aimed at helping the troubled lender generate income and pay off its creditors, with up to $800 million in debt.
The Singapore High Court began hearing Babel’s bankruptcy protection case on April 17, 2023, which will initiate the in-court reorganization process. Yang shared this update on Twitter and added that going forward, the Hope initiative would be his top priority.
Yang through the letter on Twitter expressed his gratitude to the Singapore High Court for their expertise and fairness in handling the bankruptcy protection case. He said the proceedings are complex, but the court has displayed professionalism, objectivity, and effectiveness throughout the process.
Yang also commended Kirkland & Ellis, Allen & Gledhill, and Houlihan Lokey for their professionalism, support, and advice, which gave the team crucial encouragement and assistance.
Furthermore, Yang thanked the creditors for their patience and support, as well as the preference owners for their cooperation. The team expressed gratitude for the support of all parties involved in the matter.
On March 13, 2023, Yang announced the launch of the Hope DeFi project, which he described as a hybrid of decentralized finance (DeFi) and centralized finance (CeFi). The goal of the project is to offer the transparency and security of DeFi while also providing the accessibility and efficiency of centralized financing on a level that has not been seen before.
The Hope DeFi project includes a token named after the project itself, which is expected to increase in value and eventually approach one dollar in value as acceptance grows. However, unlike other stablecoins that prefer to utilize cash and currency equivalents as their underlying assets, the Hope token will initially rely on reserves of Bitcoin and Ether.
Babel was one of several crypto lending businesses that faced significant liquidity issues as a result of the 2022 crypto bear market. In June 2022, the Hong Kong-based company ceased accepting redemptions and withdrawals from its products due to exceptional liquidity challenges. Reports indicate that Babel lost $280 million on proprietary trades that were made with client funds.
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