- Babel Finance plans to launch a stablecoin to tackle the financial crisis.
- Seeking a moratorium of protection from the high court of Singapore.
- The co-founder was allegedly responsible for losses leading to the crisis.
According to a Bloomberg report, Babel Finance, a crypto lender that faced a financial crisis last year leading to the freezing of withdrawals, is looking to resolve the situation through the launch of a new stablecoin.
Yang Zhou, the co-founder and current sole director of Babel Finance, is planning to seek a moratorium of protection from the high court of Singapore, asking creditors to refrain from taking any action against the company for a period of up to six months while it proposes a restructuring plan and seeks their approval.
Babel faced a liquidity crisis in mid-2022 that resulted in restrictions on withdrawals and redemptions from its platform. It was later disclosed that the lender suffered losses of over $200 million in cryptocurrencies due to its inability to meet margin calls.
Bloomberg reports that Babel’s Co-Founder, Wang Li’s trading activities caused the loss of an additional $524 million worth of Bitcoin, Ethereum, and other tokens. This led to a $766 million order-book deficit for the company’s proprietary trading desk.
In the recent court filing, it has been alleged that Babel Finance’s Co-Founder, Wang Li, is solely responsible for the losses incurred by the company. The document suggests that the high-risk trading activities were directed by Wang alone.
It is worth noting that Wang was removed from his position as a leader at the company in December of last year. When contacted by Bloomberg via text message, Wang acknowledged the court filing but declined to provide any further details or comment on the matter.
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