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Troubled cryptocurrency lending company Babel Finance has been granted additional time to settle debts with creditors such as Deribit following the suspension of withdrawals in 2022.
A Singapore court has prolonged creditor protection for Babel Finance by an additional three months, as reported by Bloomberg on April 18.
As stated by Babel co-founder and former CEO Flex Yang, the moratorium will extend until July 21, allowing the firm to advance its restructuring strategy through a new decentralized finance (DeFi) initiative named Hope. Flex has returned to manage Babel’s restructuring efforts a few years after resigning from his CEO position in 2021.
Flex Yang, former CEO of Babel Finance and founder of the Hope DeFi ecosystem. Source: TechCrunch
Babel’s restructuring strategy includes the introduction of new tokens referred to as “Babel Recovery Coins,” which are intended to help the distressed lender generate revenue to repay up to $800 million to its creditors.
Flex also mentioned in an open letter on Twitter that Babel’s bankruptcy protection was addressed in the Singapore High Court on April 17, officially initiating the in-court reorganization process. He emphasized that his primary focus moving forward would be the Hope project, stating:
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“In the coming international political changes, HOPE will be an important tool for us to reconnect the world. […] We are confident that our new team will continue to use their hope and light to move the new project forward.”
As previously noted, Flex, a co-founder, launched the Hope DeFi project in mid-March 2023, positioning it as a blend of DeFi and centralized finance to provide DeFi-level transparency and security alongside centralized finance-level accessibility.
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Another co-founder of Babel, Yang Zhou, initially unveiled the Hope project in early March, describing its native Babel Recovery Coin as a stablecoin minted as collateral based on Bitcoin (BTC) and Ether (ETH). The token is designed to uphold its 1:1 peg with the U.S. dollar through arbitrage incentives for traders.
Babel was among several crypto lending firms that faced significant liquidity challenges due to the bear market in 2022. The Hong Kong-based company halted withdrawals and redemptions from its products in June, citing unusual liquidity pressures. Babel reportedly incurred a loss of $280 million in proprietary trades involving customer funds.
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