- Babel co-founder Yang Zhou is now the company’s sole director.
- A completely reserved stablecoin dubbed HOPE is proposed as part of restructuring plan.
According to a report by Bloomberg, Babel Finance, a crypto lending platform located in Hong Kong, wants to develop a decentralized stablecoin that will be used to repay the firm’s debtors. Babel co-founder Yang Zho is now the company’s sole director. He is at the heart of the restructuring efforts. Which center on a decentralized finance (DeFi) initiative named “Babel Recovery Coins.”
A completely reserved stablecoin dubbed HOPE and another token dubbed Light Token are promoted as part of a dual-token ecosystem. According to the petition, the “Babel Recovery Coins” initiative would produce revenue to repay Babel’s creditors. The HOPE stablecoin will first be backed by Bitcoin (BTC) and Ethereum (ETH), with other currencies added at a later date.
Exceptional Liquidity Challenges
After being caught up in the collapses of the Terra ecosystem, Celsius Network, and Three Arrows Capital, Babel Finance received $80 million at a $2 billion value in May 2022. But froze redemptions and withdrawals the following month, claiming exceptional liquidity challenges.
8,000 Bitcoin and 56,000 Ether, valued at around $225 million, were allegedly lost by Babel exchange. The cryptocurrency exchange claims that its clients and it lost a combined $524 million worth of Bitcoin, Ethereum, and other cryptocurrencies. Due to the high-risk trading strategies used by Babel’s co-founder Wang Li. Moreover, Wang was removed from his position as head of the company in December of last year.
Moreover, the business decided to seek a moratorium of protection with the Singapore high court. Asking its creditors to refrain from pursuing any further action against it for up to six months.
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