Babel Finance, the crypto financial service provider, has decided to introduce a decentralized stablecoin, called “Babel Recovery Coin”, arguing that the new stablecoin could help resolve the debts of almost $766 million the crypto lender owes to creditors resulting from 2022’s crypto winter.
Yang Zhou, the co-founder of Babel Finance filed a petition for protection with the Singapore court, requesting the creditors to be patient, without taking further legal procedures against the company, for at least six months, a period the company seeks its approval from the court for a restructuring plan. The global financial markets news reporter, Bloomberg Markets, shared a Twitter thread, declaring that “Babel Finance is betting a stablecoin can resolve the troubled crypto lender’s financial crisis, which came to a head last year when it froze withdrawals.”
According to the company’s restructuring plan, Babel Finance would mint the new stablecoin through a new decentralized finance (DeFi) project, Hope, using Bitcoin and Ether as collaterals. Further, the revenue generated through minting would be utilized for repaying the debts to the creditors.
Notably, Babel Finance alleged that the company’s co-founder Wang Li has been responsible for a majority of the losses the company had. The platform claimed that “the risky trading activities appear to have been instructed solely by Wang”; almost $524 million worth of cryptocurrencies owned by the firm was allegedly lost due to the mishandling of Wang Li.
Consequently, Wan Li was terminated from the company and Zhou affirmed that the new plan would be executed with the help of a few former employees in Hong Kong.
Source: coinedition
