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Babel Finance's creditor protection has been extended amid its in-court restructuring process.
Flex Yang, Babel's co-founder and former CEO, announced on Twitter that the "moratorium of Babel Finance Group was heard in the High Court of Singapore, officially opening the in-court restructuring procedure."
A open letter - 👇 - Thank you!— Flex 🌕 @ HOPE (@HopeMoonman) April 17, 2023
Yang said his new stablecoin project Hope is will be used to pay back creditors. Hope was introduced last year and is planned to transition from being backed by BTC and ETH to being real-world asset backing.
"Babel Recovery Coins" are also in the works, which the team plans to distribute to stakeholders.
Light, another initiative, is the governance token of Yang's proposed DAO as part of Babel's recovery plans. A proportion of trading fees from Hope will be given to the DAO if approved.
Singapore's high court has extended Babel's creditor protection to 21 July 2023.
Launched in 2018, Babel started out as a lender to crypto miners in China. It has since moved its operations to Hong Kong, where it now caters to high-net-worth individuals and institutional investors.
Last June, the platform temporarily suspended withdrawals and redemptions of crypto assets following a market capitulation as a result of the Terra (LUNA) debacle. Babel owes $800 million to creditors.
In March, the embattled crypto lending platform filed an application for a moratorium in Singapore's high court to protect itself from its creditors for a further 6 months, as it sought their approval on the restructuring plan.
A court filing alleged that Babel's other co-founder Wang Li was responsible for the company's order-book deficit of US$766 million using customer funds.
Babel estimates that US$524 million worth of BTC, ETH, and other tokens were lost as a result of Wang's trading activities, with a further US$224 million lost to liquidations when Babel was unable to meet its margin calls.
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