Lender Babel Finance Lost $280M Trading Customer Funds: Report

The firm is looking to convert hundreds of million in debt into equity after a series of trading losses.

AccessTimeIconJul 29, 2022 at 9:36 a.m. UTC
Updated May 11, 2023 at 5:42 p.m. UTC

Babel Finance, the Hong Kong crypto lender that suspended withdrawals last month amid "liquidity pressures," reportedly lost $280 million in proprietary trades with customer funds, The Block reported, citing a restructuring proposal deck.

The firm lost around 8,000 bitcoin (BTC) and 56,000 ether (ETH) in June in forced liquidations as the crypto market plunged to an 18-month low, sending bitcoin below $20,000, the deck shows, according to The Block. The trades were unhedged in what was described as a "volatile trading week."

Babel Finance was one of several crypto companies struck by market contagion in June. Its decision to halt withdrawals followed that of Celsius Network and Voyager Digital, with hedge fund Three Arrows Capital also receiving margin calls from several lenders.

Babel is aiming to convert hundreds of millions of dollars of debt into equity as it looks to obtain a revolving credit facility to raise funds, according to the deck, The Block said.

Earlier this month Babel looked to hire restructuring specialist Houlihan Lokey.

The lender also said it reached preliminary debt agreements with counterparties in June.

Babel Finance did not immediately respond to CoinDesk's request for a comment.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Oliver Knight

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.