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Troubled crypto lending firm Babel Finance is working on a new plan to raise funds through a crypto-backed stablecoin.
The new stablecoin being proposed is called the Babel Recovery Coin. The plan is to maintain a price of $1 for the coin in the market through a system of trade incentives, and is supported by bitcoin (btc) And Ethereum (ETH),
The new coin has been proposed by Babel Finance co-founder Yang Zhou, who is now the sole director of the Singapore-based company, as a way to repay creditors while giving the company a chance to continue operating.
First came the news of recovery plan informed of It was discussed by Bloomberg, and later by the crypto community on Twitter, where one user ridiculed the proposal as an attempt to “bring it back to a business”:
Filed Moratorium of Protection
According to a Bloomberg report, Yang has now filed a stay of protection petition at the High Court of Singapore, asking the court to block creditors from taking action against the company for six months while a recovery plan is negotiated. Its being done.
In the filing, Yang also reportedly blamed Babel’s troubles on co-founder Wang Li, who left the company in December last year. It is estimated that $525 million in BTC, ETH and other cryptocurrencies were lost as a result of trading activities under Wang’s direction.
,[…] The risky trading activities appear to have been directed solely by Wang,” the filing said according to Bloomberg.
Neither Wang Li nor Yang Zhou have publicly commented on the report so far.
Similarities with other stablecoins
Being backed by BTC and ETH, Babel Recovery Coin has some similarities with decentralized stable coins such as MakerDAO. Midwife, which is backed by a basket of other cryptocurrencies and stablecoins. it also brings to mind Failed Algorithmic Stablecoin TerraUSD ,ast), which was backed by disgraced Terra founder Do Kwon along with BTC before the collapse.
Babel Finance started in China with the backing of several leading China-focused investors, including Sequoia Capital China, Tiger Global and Dragonfly Capital. The firm later set up shop in Singapore, where it is now headquartered.
Babel is one of the many crypto lending firms that have faced trouble during the latest crypto market downturn. Other firms in the same category include bankrupt US-based crypto lender Celsius, blockfiAnd voyager digitalas well as bankrupt crypto hedge funds three arrows capital (3AC).
