Cryptocurrency lending firm Babel Finance has been granted a three-month extension on its creditor protection in Singapore, according to a report from Bloomberg.
This latest moratorium will allow the firm to pursue its restructuring plan through a new decentralized finance (DeFi) project called Hope. Babel’s restructuring plan includes new tokens called “Babel Recovery Coins,” which are designed to generate revenue for repaying up to $800 million in debts to its creditors, such as Deribit.
Babel co-founder and former CEO Flex Yang returned to oversee the firm’s restructuring process after stepping down in 2021.
In an open letter on Twitter, Flex stated that Babel’s bankruptcy protection was heard in the Singapore High Court on April 17, officially opening the in-court reorganization procedure.
He noted that his main focus going forward would be the Hope project, positioning it as an important tool for reconnecting the world in light of upcoming international political changes.
The Hope project is a combination of DeFi and centralized finance that aims to offer DeFi-level transparency and security and centralized finance-level access. The project’s native token, the Babel Recovery Coin, is a stablecoin minted as collateral based on Bitcoin (BTC) and Ether (ETH) and designed to maintain a 1:1 peg with the U.S. dollar through arbitrage incentives for traders.
Babel Finance suspended withdrawals in 2022, prompting the need for creditor protection. The latest extension on creditor protection will last until July 21, providing more time for Babel to execute its restructuring plan through the Hope project.
