- Babel Finance`s potential savior could be a new stablecoin.
- The project involves creating “Babel Recovery Coins.”
- Customers lost around $524 million worth of Bitcoin, Ether, and other tokens.
Babel Finance, the embattled crypto lender that faced a severe financial crisis in 2022 with frozen withdrawals, is now considering a novel solution. According to a high-level executive, the company’s potential savior could be a new stablecoin.
The move is seen as a bold and risky bet, but could it be the key to restoring Babel Finance’s stability and reputation in the crypto industry?
The project involves creating “Babel Recovery Coins,” which would be minted using revenue generated by the project. The plan, which was detailed in a confidential document seen by Bloomberg News, proposes repaying creditors using the proceeds from the new initiative.
However, the company is now pointing the finger at its co-founder, Wang Li, for a significant loss incurred by its trading desk. According to sources close to the matter, Babel Finance is alleging that Wang Li’s poor decision-making and risky trading strategies were the root cause of the trading desk’s losses.
The accusations have sparked a heated dispute within the company, with some defending Wang Li’s track record and others calling for accountability and a change in leadership.
According to estimates, Babel and its customers have lost around $524 million worth of bitcoin, ether, and other tokens.
In addition, Babel Finance was unable to meet a large number of margin calls, leading to the liquidation of collateral by its counterparties, resulting in further losses of $224 million. The staggering amount of losses has cast a shadow over Babel Finance’s financial stability and raised serious concerns about the company’s ability to recover and regain the trust of its customers and investors.