Babel Finance is hoping for a new StableCoin project to solve financial problems: report

Babel Finance is hoping for a new StableCoin project to solve financial problems: report

Babel Finance co-founder Yang Zhou relies on a new stable coin to pull the battered crypto loan out of the financial crisis.

Last June, the project based in Hong Kong was one of the three prominent companies that falter and forced it to hire the payments. The company's proprietary trading switch led customer funds worth $ 766 million into risky trading activities. The focus is now on the repayment of the debt.

repayment of debts

Babel has proposed to use the income from a decentralized financial project, the "Babel Recovery" shapes coins "to repay the debts, which she owes to the creditors. Zhou, who happens to be the sole director of Babel, believes that this new stable coin can solve the financial problems of the crypto credit.

yang previously resigned from his leadership position, but later resumed it. According to a report by Bloomberg, the project in question is called "Hope", for which the manager has teamed up with some former Babel employees in Hong Kong.

First, the stable coin of the same name from Hope Bitcoin (BTC) and Ether (Eth) will use as security. According to the website, the new asset will keep its value through arbitrage incentives for retailers close to a dollar, in contrast to popular stable coins such as USDC, which are completely covered by cash and cash-like assets.

In the meantime, Zhou also tries to submit a protective moratorium to the Singapore's highest court. This would prevent creditors from initiating further steps against the company for up to six months, since it is looking for their consent to a restructuring plan.

Who is liable for the losses?

Babel's new project is advertised as a glimmer of hope, but the report claims that the commercial activities of his co -founder Wang Li have contributed to his current condition. In the file viewed by Bloomberg, Li is "responsible" for the losses that occurred due to "risky trading activities" that were only dependent on the management.

It is estimated that the company has lost Bitcoin, Ether and other crypto-assets worth $ 524 million. Another $ 224 million were lost when the collateral of the counterparty were liquidated after they were unable to meet a large volume of additional claims. These accusations prompted Babel to relieve Li from his leadership role in December last year.

Only one month before Babel almost succumbed to liquidity pressure, Babel collected $ 80 million in a financing round of Series B, led by Circle Ventures, 10T Holdings, Jenerations Capital, Bai Capital and Dragonfly Capital. Family offices from the Asian-Pacific area also took part in the round, which increased the company's assessment to $ 2 billion.

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