Babel Finance Considers Minting Special “Recovery” Stablecoin
- Babel Finance co-founder Yang Zhou is planning to propose the creation of a new DeFi project in order to generate revenue to repay debts owed to creditors.
- Called Hope, the potential DeFi platform aims to mint a new crypto-backed stablecoin, which will serve as a type of “recovery coin” for Babel.
Shutterstock
Troubled cryptocurrency lender Babel Finance is planning to implement a new restructuring plan in hopes of repaying creditors following its $766 million loss last year, Bloomberg reported on 6 March.
According to the publication, Babel Finance co-founder Yang Zhou could soon file a moratorium extension with the Singapore high court, which would prevent creditors from making claims for six months. Zhou will also seek the approval of creditors to implement a new restructuring plan, which will see the company launch a new decentralized finance (DeFi) project.
The potential DeFi platform will be called Hope, and aims to mint a new stablecoin under the same name, which will serve as a type of “recovery coin” for Babel. The DeFi platform will use Bitcoin and Ether as collateral for the Hope stablecoin, which will maintain its 1:1 ration with the U.S. dollar through arbitrage incentives for traders.
Babel Finance is one of the many crypto lenders who experienced liquidity issues caused by the 2022 bear market, and suspended withdrawals and redemptions from its products back in June due to “unusual liquidity pressures”.
Zhou’s filing alleges that the troubles experienced by Babel Finance were caused by another co-founder Wang Li — who stepped down as CEO of Babel back in December — noting that “the risky trading activities appear to have been instructed solely by Wang”. It is estimated that the company owes as much as $524 million worth of BTC and ETH to creditors due to Wang’s trading losses. The company lost another $224 million when other crypto lenders liquidated collateral that underpinned loans issued to Babel.
- 40 branches of Signature Bank will be reopened and operated as Flagstar Bank after it acquires $38.5 billion in non-crypto deposits and $12.9 billion in loans.
- The FDIC confirmed that the $4 billion in Signature Bank crypto deposits will be directly returned to customers who had opened a digital asset banking account.
Shutterstock
- Binance’s fiat banking partner, Skrill Limited, informed the exchange that it will no longer provide GBP on- and off-ramp to its customers starting 22 May.
- The owner of Skrill, Paysafe, said it decided to stop offering its embedded wallet solution to Binance due to the “challenging” regulatory environment in the U.K..
- DeFi lender Tender.fi has paused all borrowing while investigating an exploit which saw an attacker borrow $1.6 million worth of assets using only 1 GMX token.
- The attacker, however, appears to be a white hat hacker who the platform has already contacted in order to remedy the situation.