Hong Kong based Babel Finance, with operations in Singapore is currently undergoing a restructuring process to better cope with its debt. Reports indicate that around $750 million to $800 million in debt have been accumulated, making this a challenging situation for the firm. The difficulties arose after the dip in cryptocurrency values saw many other businesses experience similar struggles.

Babel Finance has formulated a strategy that involves the establishment of a new stablecoin. This is intended to generate proceeds to be used to repay the money owed to creditors. The particular coin that is to be utilized is known as ‘Hope’ and will be backed with BTC and ETH as well as having its price pegged to the US dollar, similar to the well-known DAI and UST methods. Notably, with Hope, the collateral is set up by a completely separate business distinct from LUNA-UST.

On April 5, the creditor protection moratorium for Babel Finance was scheduled to expire. Fortunately, the court granted a temporary suspension until the creditor protection petition undergoes its next hearing on April 17. This offers hope that some kind of solution can still be reached.

It should be noted that prior to the issues, Babel Finance was a successful cryptocurrency lender funded by Sequoia Capital China. Unfortunately, losses from proprietary trading of customer funds was an earlier issue contributing to the current crisis. These losses saw the firm suspend withdrawals in June 2022.

The issues facing Babel Finance are a complex item, however, the establishment of Hope provides some optimism that a positive resolution can still be attained eventually.



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